Social connections between media and firm executives and the properties of media reporting

• 成果类型: Article
• 署名作者: Ru, Yi; Xue, Jian; Zhang, Yuan; Zhou, Xin
• 署名单位: Renmin University of China; Tsinghua University; University of Texas System; University of Texas Dallas
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-020-09552-x
• 发表日期: 2020
• 页码: 963-1001
• 关键词: Bias; CONSEQUENCES; friends; IMPACT; slant; TIES

摘要

We study how social connections between top executives of media and listed firms affect the properties of media reporting. We find that socially connected media are significantly more likely to cover a firm than their unconnected counterparts. Their reporting is significantly more optimistically toned and contains significantly less information, and both of these effects are significantly mitigated when the firm has better information environment as represented by greater analyst coverage and larger firm size. Additional analyses show that characteristics of the underlying news, firm, or media also affect the effects of social connections on media reporting properties. Collectively, our evidence suggests the impairment of media independence when media and firms have social connections and the importance of alternative information sources in mitigating this effect.