Media Link and the News Coverage Bias——Evidence from the Listed Companies in China

Abstract

Abstract:

In recent years, the news coverage bias of listed companies has become very popular, and scholars start to do some researches about why it occurs. In this paper, we examine whether media link will lead to the news coverage bias of listed companies empirically from the particular perspective of listed companies owning subsidiaries in media industry. The result shows that listed companies with media link have about 18% more news coverage than control group, and about 10% more good news than control group. What's more, in the samples with media link, the stronger of the media link, the bigger of the news coverage bias. Furthermore, we analyze the motivation underlying the listed companies' attempt to have the media link and find that the firm value of the media-linked listed companies that utilize media hype would be higher. Such empirical research results indicate that the listed companies have the motivation to seek media slant through the media link, and this is what regulators and investors should pay attention to.

Key words: news coverage bias, media link, firm value

Rao Yulei, Xie Qianqian, Wang Jianxin. Media Link and the News Coverage Bias——Evidence from the Listed Companies in China[J]. , 2016, 28(9): 194-205.

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