Media Coverage and Firm Valuation: Evidence from China

Author

Jiwei WANG, Singapore Management UniversityFollow
Kangtao YE, Renmin University of China

Publication Type

Journal Article

Version

acceptedVersion

Publication Date

1-2014

Abstract

Drawing on both a managerial discipline perspective and an information intermediary perspective, we explore how media coverage of a firm’s controlling shareholder influences firm valuation in corporate China. Using 366 listed family firms in China from 2003 to 2006, we find that firms in which controlling shareholders receive more neutral media reports enjoy higher valuation, whereas negative media reports on controlling shareholders impose adverse effects on firm valuation. Interestingly, favorable media coverage of the controlling shareholders does not enhance firm value. Further analyses reveal that ownership structure and audit quality moderate the relationship between media coverage and firm valuation. Our study complements the emerging literature on the monitoring role of the media on the stock markets.

Discipline

Accounting | Asian Studies | Corporate Finance

Research Areas

Corporate Governance, Auditing and Risk Management

Publication

Journal of Business Ethics

Volume

127

Issue

3

First Page

501

Last Page

511

ISSN

0167-4544

Identifier

10.1007/s10551-014-2055-5

Publisher

Springer

Citation

WANG, Jiwei and YE, Kangtao. Media Coverage and Firm Valuation: Evidence from China. (2014). Journal of Business Ethics. 127, (3), 501-511.
Available at: https://ink.library.smu.edu.sg/soa_research/1189

Copyright Owner and License

Authors

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.

Additional URL

https://doi.org/10.1007/s10551-014-2055-5