Media Attention and Regulatory Efficiency of Corporate Violations: Evidence from China

64 Pages Posted: 20 Jan 2020 Last revised: 20 Apr 2021

See all articles by Zhiqian Jiang

Zhiqian Jiang

Florida State University, College of Business, Department of Finance

Baixiao Liu

Florida State University

Jinsong Liu

Tsinghua University

Qianwei Ying

Sichuan University

Date Written: November 16, 2020

Abstract

We examine the influence of media attention on regulatory efficiency of corporate violations in restrictive media environment. Using a hand-collected sample of corporate violations in China during 1998-2018, we find that fraudulent firms accompanied by more negative media attention are associated with a higher hazard rate of the violation being investigated and enforced. The effect is not diminished by the political connections of the fraudulent firms and is robust to accounting for potential confounding factors. We interpret our findings to suggest that by playing both an informational intermediary role and a pressure-exerting role in influencing regulatory efficiency, the media can serve as an effective governance mechanism even in markets with strict media control.

Keywords: Media Attention, Regulatory Efficiency, and Corporate Violations

JEL Classification: G31, G32, G34

Suggested Citation

Jiang, Zhiqian and Liu, Baixiao and Liu, Jinsong and Ying, Qianwei, Media Attention and Regulatory Efficiency of Corporate Violations: Evidence from China (November 16, 2020). Available at SSRN: https://ssrn.com/abstract=3494688 or http://dx.doi.org/10.2139/ssrn.3494688

Zhiqian Jiang

Florida State University, College of Business, Department of Finance ( email )

Tallahassee, FL
United States

Baixiao Liu (Contact Author)

Florida State University ( email )

Tallahasse, FL 32306
United States

Jinsong Liu

Tsinghua University ( email )

Beijing
China

Qianwei Ying

Sichuan University ( email )

No. 24 South Section1, Yihuan Road,
Chengdu, Sichuan 610064
China

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