Media Competition, Multimarket Contact, and Viewpoint Diversity

36 Pages Posted: 18 Feb 2024

See all articles by Marcel Garz

Marcel Garz

Jonkoping University - Jonkoping International Business School (JIBS)

Jonna Rickardsson

Jönköping University - Jönköping International Business School

Date Written: January 1, 2024

Abstract

Media regulators in many Western countries aim to ensure that consumers have access to diverse viewpoints in news coverage. A common argument is that this goal can be best achieved if there are enough independent sources in the market, implying that media policies should foster media competition. However, the effects of competition on viewpoint diversity are theoretically ambiguous, and empirical evidence is scarce. We address this gap by compiling a comprehensive dataset on the Swedish newspaper industry, covering multiple waves of mergers and acquisitions. To address endogeneity concerns, we exploit changes in multimarket contact between companies caused by out-of-market effects of ownership changes. Our results indicate that the consolidation of the industry substantially raised the average number of multimarket contacts, which induced newspaper companies to differentiate their slant more. As a consequence, the diversity of political viewpoints decreased both within companies and at the local market level, leading to reductions in readership. The findings suggest that increasing concentration of media ownership may have negative implications for democratic processes.

Keywords: consolidation, media bias, mergers and acquisitions, newspapers, ownership concentration

JEL Classification: D72, L10, L82

Suggested Citation

Garz, Marcel and Rickardsson, Jonna, Media Competition, Multimarket Contact, and Viewpoint Diversity (January 1, 2024). Available at SSRN: https://ssrn.com/abstract=4713310 or http://dx.doi.org/10.2139/ssrn.4713310

Marcel Garz

Jonkoping University - Jonkoping International Business School (JIBS) ( email )

Jönköping, 55111
Sweden

Jonna Rickardsson (Contact Author)

Jönköping University - Jönköping International Business School ( email )

Sweden

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