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Political connections and media slant

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  • Guo, Shijun
  • Yu, Xin
  • Faff, Robert

Abstract

We examine the influence of political connections on media slant for a sample of Chinese listed firms. We find that firms with stronger political connections obtain more positive reports from major Chinese business newspapers. The association is more pronounced when firms are located in provinces with more government intervention and when the media are state-controlled (compared with market-oriented media). We further examine two explanations for the positive association between political connections and media slant. On the demand side, the firm management channel sees firms using their political connections to manage the relationship with the media for favorable reporting. On the supply side, the media intention channel has media outlets providing favorable reporting to connected firms to enhance their own relationship with the government. We find evidence supporting the firm management channel.

Suggested Citation

  • Guo, Shijun & Yu, Xin & Faff, Robert, 2021. "Political connections and media slant," International Review of Economics & Finance, Elsevier, vol. 74(C), pages 58-80.
    • Handle: RePEc:eee:reveco:v:74:y:2021:i:c:p:58-80
    DOI: 10.1016/j.iref.2021.02.003
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    2. Fan, Michelle Xiaomin & Wu, Huiying & Ying, Sammy Xiaoyan & You, Jiaxing, 2023. "Uneasy lies the head that wears a crown: Firm network status and market response to negative rumors," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).
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    More about this item

    Keywords

    Political connections; Media slant; Media management; China;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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