Media-Linked Directors and Financing Options

Abstract

This paper examines the impact of media-affiliated directors on the choice of financing methods using data from A-share listed companies in Shanghai and Shenzhen between 2010 and 2021 as a sample. The empirical findings are: media-affiliated directors positively affect a company's choice of financing methods of equity financing and bond financing, negatively affect the choice of bank loans, and at the same time favor the reduction of the company's bond financing cost, and media-affiliated directors affect a company's choice of financing methods by influencing the positive skewness of the media coverage rather than by influencing the amount of media coverage. This study not only further enriches the research on the impact of media coverage on corporate governance, but also has important practical significance for the board of directors to play a better role in corporate governance through the study of media-affiliated directors.