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

54 Pages Posted: 20 Jan 2020 Last revised: 10 Nov 2021

See all articles by Zhiqian Jiang

Zhiqian Jiang

Florida State University, College of Business, Department of Finance

Baixiao Liu

Peking University HSBC Business School

Jinsong Liu

Tsinghua University

Qianwei Ying

Sichuan University

Date Written: November 16, 2020

Abstract

We examine the influence of media attention on the regulatory efficiency of corporate violations in a 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 after controlling for potential confounding factors. Our findings suggest that by influencing regulatory efficiency, the media 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)

Peking University HSBC Business School ( email )

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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