Financing dies in darkness? The impact of newspaper closures on public finance

• 成果类型: Article
• 署名作者: Gao, Pengjie; Lee, Chang; Murphy, Dermot
• 署名单位: University of Notre Dame; Korea Advanced Institute of Science & Technology (KAIST); University of Illinois System; University of Illinois Chicago; University of Illinois Chicago Hospital
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2019.06.003
• 发表日期: 2020
• 页码: 445-467
• 关键词: media; monitoring; public finance; municipal bonds

摘要

We examine how local newspaper closures affect public finance outcomes for local governments. Following a newspaper closure, municipal borrowing costs increase by 5-11 basis points, costing the municipality an additional $650,000 per issue. This effect is causal and not driven by underlying economic conditions. The loss of government monitoring resulting from a closure is associated with higher government wages and deficits and increased likelihoods of costly advance refundings and negotiated sales. Overall, our results indicate that local newspapers hold their governments accountable, keeping municipal borrowing costs low and ultimately saving local taxpayers money. (C) 2019 Elsevier B.V. All rights reserved.