Abstract
Employing a large sample of 13,449 firms across 40 countries, we find that firms with high media coverage tend to take risky investments. We further show that this positive relation is achieved through three plausible channels, namely, the information asymmetry channel, the capital-at-risk channel, and the business strategy channel, and is enhanced in countries with strong shareholder protection and transparent information environments. Multinational analyses show that news coverage has a larger positive impact on firms with higher levels of international diversification. Domestic media and domestic institutional investors are found to enhance the positive role of media. Our main conclusions remain valid after carefully taking endogeneity issues into account and conducting various robustness tests. This study sheds new light on the real effects of media in mitigating risk-related agency conflicts.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
