Stock market entry and media coverage

Abstract

This study examines the stock market participation puzzle by researching the relationship between media coverage and the stock market participation rate in The Netherlands from the end of 2009 until the beginning of 2017. Multiple regression analysis is used to study the relationship between the number, sentiment and occurrence of news articles produced by a Dutch newspaper and the number of Dutch participants in the stock market. This study’s findings support current literature explaining that media coverage positively affects participation, while also supporting the statement that sentiment plays a part in this process. Additionally, this study finds that articles that do no appear on a daily basis have a larger effect on stock market participation than those that do.