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Media Attention and Selective Managerial Bad News Hoarding

54 Pages Posted: 13 Dec 2018

See all articles by Yangyang Chen

Yangyang Chen

Hong Kong Polytechnic University - Faculty of Business

C.S. Agnes Cheng

Hong Kong Polytechnic University - School of Accounting and Finance

Shuo Li

Western Washington University

Jingran Zhao

Hong Kong Polytechnic University

Date Written: November 21, 2018

Abstract

This paper investigates whether media attention impacts the extent to which managers hoard bad news in general and whether the effect applies to conspicuous news, such as earnings news. We find that greater media attention escalates managerial bad news hoarding; however, such an effect does not apply to bad earnings news. These findings imply that managers selectively hoard bad news that is not as regulated and as conspicuous as earnings news. In the cross-sectional analyses, we find that typical corporate governance mechanisms are not effective in mitigating bad news hoarding; rather, we find that the effect of media attention on bad news hoarding is amplified when management is more short-term oriented.

Keywords: Media attention, Crash risk, Selective bad news hoarding

JEL Classification: G12, G14, G32

Suggested Citation

Chen, Yangyang and Cheng, C.S. Agnes and Li, Shuo and Zhao, Jingran, Media Attention and Selective Managerial Bad News Hoarding (November 21, 2018). Available at SSRN: https://ssrn.com/abstract=3288414 or http://dx.doi.org/10.2139/ssrn.3288414

Yangyang Chen

Hong Kong Polytechnic University - Faculty of Business ( email )

9/F, Li Ka Shing Tower
The Hong Kong Polytechnic University
Hong Kong, Hung Hom, Kowloon M923
China

C.S. Agnes Cheng (Contact Author)

Hong Kong Polytechnic University - School of Accounting and Finance ( email )

M715, Li Ka Shing Tower
Hung Hom, Kowloon, Kowloon
Hong Kong

Shuo Li

Western Washington University ( email )

United States
3606503202 (Phone)

Jingran Zhao

Hong Kong Polytechnic University ( email )

11 Yuk Choi Rd
Hung Hom
Hong Kong

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