Media Partisanship and Fundamental Corporate Decisions

49 Pages Posted: 20 Jan 2020 Last revised: 6 Feb 2020

See all articles by April M. Knill

April M. Knill

Florida State University College of Business; Florida State University - College of Law

Baixiao Liu

Florida State University

John J. McConnell

Purdue University

Multiple version iconThere are 2 versions of this paper

Date Written: January 28, 2019

Abstract

Using the introduction of Fox News as a natural experiment, we investigate whether partisanship in television coverage influences corporate decisions. We find that, during the George W. Bush presidency, firms led by Republican-leaning managers headquartered in regions into which Fox was introduced shift upward their total investment expenditures, investment expenditures devoted to R&D, and leverage. Our findings imply that in making fundamental corporate decisions, Republican-leaning managers are swayed by the Republican slant of Fox that presents an optimistic macroeconomic outlook. The results highlight the importance of heterogeneity in media slant in understanding the role of the media in corporate decision-making.

Keywords: Media Slant, Partisanship, Corporate Decision-making

JEL Classification: G30, G32, G34

Suggested Citation

Knill, April M. and Liu, Baixiao and McConnell, John J., Media Partisanship and Fundamental Corporate Decisions (January 28, 2019). FSU College of Law, Public Law Research Paper No. 900. Available at SSRN: https://ssrn.com/abstract=3280982 or http://dx.doi.org/10.2139/ssrn.3280982

April M. Knill (Contact Author)

Florida State University College of Business ( email )

Tallahassee, FL 32306-1042
United States
(850) 644-2047 (Phone)

Florida State University - College of Law ( email )

425 W. Jefferson Street
Tallahassee, FL 32306
United States

Baixiao Liu

Florida State University ( email )

Tallahasse, FL 32306
United States

John J. McConnell

Purdue University ( email )

MGMT, KRAN
403 West State St.
West Lafayette, IN 47907-2056
United States
765-494-5910 (Phone)
765-494-7863 (Fax)

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