Media Coverage and Earnings Management of Commercial Banks

Abstract

Abstract: From the perspective of loan loss provision, this study examines the impact of media coverage on earnings management of commercial banks in China. The results show that the higher the degree of media coverage, the lower the degree of earnings management of commercial banks. The empirical results prove that media coverage can play an “effective supervisory” role. At the same time, it is also found that policy-oriented media has a greater impact on the earnings management of commercial banks than market-oriented media. In addition, the impact of media reports on the earnings management of commercial banks is more prominent among non-state-owned banks and non-listed banks. This shows that media reports influence commercial banks’ earnings management through two ways: public governance and information dissemination. This research has important practical guiding significance for the regulatory authorities to formulate policies and promote the improvement of commercial banks’ earnings quality.

Key words: media coverage, earnings management, loan loss provision

Zhang Zhiwei, Zhang Dayong, Ji Qiang, Sun Xiaolei. Media Coverage and Earnings Management of Commercial Banks[J]. Management Review, 2022, 34(10): 67-78.

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