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Online social networks, media supervision and investment efficiency: An empirical examination of Chinese listed firms

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  • Yang, Xiaoping
  • Cao, Dongmei
  • Andrikopoulos, Panagiotis
  • Yang, Zonghan
  • Bass, Tina

Abstract

Prior literature suggests that media reports acting as external supervision improve information transparency and corporate governance leading to increased investment efficiency. This study empirically tests this hypothesis in the context of online social networks by investigating the combined effects of online social networking and media reports on investment efficiency using a sample of Chinese listed firms. Our results show that the interaction of media reports and Tobin's q ratio is negatively related to corporate investment efficiency. However, the introduction of online social networks turns this relationship from a negative to a positive and statistically significant one. The combined factors significantly increase investment efficiency in non-SOEs (State Owned Enterprises) but not in SOEs. We provide evidence that online social networking effectively mitigates the negative effect of media supervision on investment efficiency, further advancing knowledge of the link of external supervision and corporate governance.

Suggested Citation

  • Yang, Xiaoping & Cao, Dongmei & Andrikopoulos, Panagiotis & Yang, Zonghan & Bass, Tina, 2020. "Online social networks, media supervision and investment efficiency: An empirical examination of Chinese listed firms," Technological Forecasting and Social Change, Elsevier, vol. 154(C).
    • Handle: RePEc:eee:tefoso:v:154:y:2020:i:c:s0040162519309503
    DOI: 10.1016/j.techfore.2020.119969
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    More about this item

    Keywords

    Online social networks; Media supervision; Investment efficiency; China; Sina Weibo;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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