Media Coverage and Firm Valuation: Evidence from China

34 Pages Posted: 5 Jun 2013 Last revised: 19 Jul 2014

See all articles by Jiwei Wang

Jiwei Wang

Singapore Management University - School of Accountancy

Kangtao Ye

Renmin University of China - School of Business

Date Written: 2013

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 2003–2006, 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.

Keywords: Media Coverage, Valuation, Family Firms, China

JEL Classification: G30, L25, M41

Suggested Citation

Wang, Jiwei and Ye, Kangtao, Media Coverage and Firm Valuation: Evidence from China (2013). Journal of Business Ethics, Forthcoming, Singapore Management University School of Accountancy Research Paper No. 2014-15, Available at SSRN: https://ssrn.com/abstract=2274048 or http://dx.doi.org/10.2139/ssrn.2274048

Jiwei Wang (Contact Author)

Singapore Management University - School of Accountancy ( email )

60 Stamford Road
Singapore, 178900
Singapore
(65) 6828 0616 (Phone)
(65) 6828 0600 (Fax)

HOME PAGE: http://www.mysmu.edu/faculty/jwwang/

Kangtao Ye

Renmin University of China - School of Business ( email )

Beijing
China

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