Media Tone Research Articles

Does Media Tone Influence Pre‐IPO Earnings Management? Evidence from IPO Approval Regulation in China

Unlike the reputation view on the governance role of the media, we propose that media coverage influences pre‐IPO earnings management through the regulation mechanism. Using the Chinese initial public offering (IPO) approval regulation setting, we find that negative pre‐IPO media tone is associated with lower abnormal accruals but with higher real transactions manipulation and total earnings management in IPO prospectuses. We also find that the media's effect is more pronounced when IPO firms face stronger regulatory scrutiny such as when they have no approval committee connections, no political connections, or no state ownership. Further, we find that the effect of media tone is stronger when the media outlet has high circulation or high credibility. Our findings suggest that, in a highly regulated market, the media plays a limited governance role because, although it has the effect of restraining accruals management, this effect is substituted with more real transactions manipulation to reduce the risk of being punished by regulators.

Tracing the Conflict Between Türkiye and Syria Through the Turkish Mainstream Media's Coverage of the Syrian President Bashar al‐Assad

The Syrian civil war began in March 2011 and spread throughout the country in April 2011. Therefore, in this study news articles and columns published in 2011 were selected and analyzed through purposive sampling. This study uses content analysis to examine the coverage of Syrian President Bashar al‐Assad in mainstream print newspapers with different ideological orientations in Türkiye. The theoretical framework of this study is based on the concept of localization of foreign news. The research has the potential to reveal both the transformation of the tone of media texts over time and the similarities and differences in the coverage of an international conflict by newspapers with different ideological orientations. Despite ideological differences, the study reveals similarities in the orientation of the newspapers studied toward local interests. The dominance of Turkish officials as news actors, the limited portrayal of Syrian security forces, and the selection of photographs reinforce the parallel stance with Turkish foreign policy. The media's tone toward Assad and Syrian politics became more negative and critical as the conflict escalated.

Media tone and trading activity on the Sydney Stock Exchange 1901–1950

We examine how media reports influenced trading volumes and order imbalances on the Sydney Stock Exchange (SSX) from 1901 to 1950, focusing on wool market reports as a substitute for broader financial advice in the absence of a specialised investment press. Given wool's status as Australia's primary export and its integration with various sectors, we construct a weekly media sentiment index based on news about wool sales and auctions from the Sydney Morning Herald. Our findings reveal that positive news about the wool market correlates with increased trading volumes and reduced order imbalances on the SSX. This relationship persisted during significant events such as the UK government's wool purchase plans, the 1929 Wall Street Crash, World War II-related trading restrictions, and the short selling ban.

Climate transition risk and corporate environment, social and governance performance: Evidence from Chinese listed companies

AbstractUsing a sample taken from Chinese A‐share listed companies from 2010 to 2020, we explore the effect of climate transition risk on corporate environment, social and governance (ESG) performance. Our finding shows that climate transition risk promotes corporate ESG performance. In addition, we discover that equity incentives play an important positive moderating role in the above relationship. Compared with positive media tone, the positive effect of climate transition risk on corporate ESG performance is more significant under the moderating effect of a negative media tone. Further analyses find that there exists a more prominent relationship between climate transition risk and corporate ESG performance in non‐state‐owned enterprises, enterprises with more female directors, and enterprises in highly market‐oriented regions. Our findings provide a reference to improve ESG practice to achieve corporate sustainable development and provide practical suggestions for better dealing with climate transition risk.

15금 BL웹툰 <팔재>의 스토리텔링 전략 연구

The 15-rated BL webtoon <Paljae, Child of Winter> succeeds by adopting an unusual material of oriental fantasy. The storytelling strategy of <Paljae, Child of Winter> is threefold: engaging the viewer through a multi-layered narrative of exploration and reflection, expanding the backstory by using the variability of character relationships, and maximizing the tastiness of the oriental painting style that blends with fantasy. First, by reinterpreting and transforming the familiar classic narrative in a modern way and superimposing the pasts of the two characters, the creator built a more complex, multi-layered narrative that aroused the curiosity of the enjoyers and created a participatory culture that they explored and reflected on. At the same time, character relationships that change over time and space give the causality of actions and the probability of events, enriching the narrative and setting backstories apart. Finally, <Paljae, Child of Winter> achieved aesthetic fulfillment with ink painting style artwork, realistic and transparent artwork with medium tones, and long, dynamic artwork per scene. In this way, <Paljae> has achieved its own unique aesthetic, by weakening the sexualized elements, building up the narrative with fantasy and backstory, and painting it in a more aesthetic way. The 15-rated BL webtoons have formed an independent market between girls’ cartoons and 19-rated BL webtoons. The achievement of <Paljae, Child of Winter> is significant not only in terms of diversifying the BL webtoon market, but also in terms of raising the unique status of 15-rated BL webtoons.

How to drive heavily polluting companies to fulfill environmental responsibility? The synergy between environmental regulation and digital media coverage

This paper addresses the question of how environmental regulation and digital media coverage, as formal and informal external monitoring mechanisms, affect corporate environmental responsibility fulfillment. Using the data of Shanghai and Shenzhen A-share listed companies in China's heavily polluting industries, this study showed that both environmental regulation and digital media coverage significantly improve responsive and strategic environmental responsibility fulfillment. After distinguishing the media tone, it was found that positive digital media coverage promotes the fulfillment of both responsive and strategic environmental responsibilities. In contrast, negative digital media coverage only stimulates the fulfillment of responsive environmental responsibility, which reflected an asymmetrical effect of media tone. Further, the hierarchy of governance amplifies the role of environmental regulation in triggering the fulfillment of responsive environmental responsibility but weakens its value to strategic environmental responsibility. Inconsistent with our predictions, the relationship between digital media coverage and corporate environmental responsibility fulfillment could not be significantly moderated by Confucian culture. In addition, environmental regulation and digital media coverage only existed in companies with separate chairperson and manager positions, which indicated that an excellent internal governance environment is a prerequisite for external monitoring mechanisms to play a role in environmental governance. This study enriches the literature on how to drive responsive and strategic environmental responsibility by uncovering an external governance effect of environmental regulation and digital media coverage on the fulfillment of corporate environmental responsibility, and provides inspiration for multiple environmental governance actors to promote the construction of ecological civilization collaboratively.

Negative Media Tone and Leverage Adjustments

This paper examines how negative publicity influences firms’ capital structure decision. We find that firms exhibit faster adjustment of capital structure toward the target level after more negative media coverage, advocating the monitoring role of negative media sentiment on corporate behaviors. Further, our finding is significantly stronger for non-chaebol firms. Additional analyses show that the monitoring role is stronger when firms are more scrutinized by outsiders and have better corporate governance. Overall, this paper shows evidence that negative media sentiment could play an effective role in monitoring firms’ capital structure and correcting their inefficiencies.

Trade War Actions, Reporting Strategies, and Stock Market Reactions

Investors’ perceptions of uncertainty have increased since Donald Trump’s inauguration, primarily as a result of trade frictions. In the context of China-US trade frictions, this study investigates the joint effects of the actions of the parties and media tone on the Chinese stock market. The trade friction reports are classified into 12 groups based on two dimensions, that is, the actions of the parties and the tone of the state-controlled media. The result shows that the role played by the state-controlled media depends on the actions taken by both the parties, as well as the type of firms. Specifically, when the US took action, either launched attacks or made concessions, adopting a high tone played some role in boosting returns and curbing fluctuations; adjusting reporting strategies also played some role in elevating the liquidity of both types of firms and influencing domestic southbound investments. Market reactions were more influenced by the actions than the official attitudes when China made concessions or when both sides took action (attacks or concessions).

Discourse wars and ‘mask diplomacy’: China’s global image management in times of crisis

ABSTRACT To achieve foreign policy goals and boost prestige, states try to influence how foreign publics perceive them. Particularly during crises, the imperative to mitigate a negative image may see states mobilize resources to change the global narrative. This paper investigates whether China’s ‘mask diplomacy' efforts influenced portrayals of the country in the early days of the Covid-19 pandemic. We validate and apply a semi-supervised scaling method to 1.5 million English statements in newspapers around the world mentioning China and Covid-19. Multi-period difference-in-differences models reveal that media tone improved significantly after mask diplomacy engagement. Using its Covid-19 White Paper to determine China’s preferred external narratives, we also find that a country’s domestic media reproduced key terms more after the country received PRC support.

Do stress and overstatement in the news affect the stock market? Evidence from COVID-19 news in The Wall Street Journal

This study investigated the effect of media coverage on financial markets in response to COVID-19-related news. By collecting data from the United States Centers for Disease Control and Prevention, we study the effect of The Wall Street Journal's coverage and tone on stock markets. In particular, we attempted to measure media overstatements by comparing the number of articles and stress words with the number of COVID-19 cases. We obtained three main findings. First, investors discount macroeconomic news and objective measures of COVID-19. Second, excessive stress in the media tone leads to greater uncertainty and lower returns. Third, these results hold across sectors, although heterogeneity exists. Overall, long periods of high-stress sentiment and uncertainty affect investors more than single-day news.

Media abnormal tone and cross section of stock returns: Evidence from China

AbstractThis paper introduces an innovative methodology for extracting information from textual data to explain cross‐sectional stock returns, addressing limitations of conventional media tone measures. We find firms exhibiting higher media abnormal tone yield lower future returns in the Chinese market, even when controlling for common risk factors. This effect is more pronounced among firms with low investment, low profitability, and high short‐term reversal. We also find the negative premium generated by media abnormal tone results from mispricing, highlighting investor overreaction despite media's role in disseminating concurrent firm information. Furthermore, the tendency for media outlets to follow suit exacerbates investor overreaction.

Implicit government guarantees, media tone and bond pricing

AbstractBy exploiting the first public bond default event in China—the Chaori bond default in 2014—we examine how implicit government guarantees shape the role of media information in bond pricing. We find an insignificant association between preissuance media tones and bond issuances’ yield spreads before the event; however, the association becomes negative and significant after the event. The role of media tone in bond pricing is more pronounced for regions with greater information demand for default risk and for media outlets with stronger information provisions toward implicit government guarantees after the event. Mechanism analyses suggest increased bond investors’ risk awareness, rather than strengthened information provisions in media tones, as the force behind the more pronounced role of media tone in bond pricing. Finally, lower yield spreads driven by more positive media tone do not suggest bond overpricing. Our study reveals the role of media tone in bond pricing and displays the evolution of the media tone's role in bond pricing due to changing institutions.

Is the tone of the government-controlled media valuable for capital market? Evidence from China's new energy industry

This study examines the influence of the tone used by government-controlled media on the stock prices of new energy firms. By applying BERT, a large language model, we quantify the tone of the new-energy-related articles published by the primary government-controlled media of China. We find that the government-controlled media tone positively and significantly influences the short-term returns of new energy stocks. By comprehensively performing mechanism analysis, we show the government-controlled media tone plays a key role in communicating information rather than triggering stock price overpricing. We further find that the official media tone influences equity financing cash flows of new energy firms and in turn affects their asset expansion, investment and R&D activities. Overall, our findings reveal that the government-controlled media tone contains fundamental information valued by the investors and the information ultimately influences the development of Chinese new energy industry through affecting the corporate real activities.

Extreme state media reporting and the extreme stock market during COVID-19: A multi-quantile VaR Granger causality approach in China

This study examines the causality between extreme state media coverage and extreme stock market return during the COVID-19 crisis in China. Using XinwenLianbo as a proxy for national media, we find bidirectional Granger causality between state media focus/tone and stock market returns under extreme conditions. We also find that the spillover effects of extreme risk are heterogeneous across different industries, companies of different sizes and ownership structures, and at different timescales for stock market returns. Robust and extended testing shows that our results are valid after accounting for the severe impact of COVID-19, although the extreme risk spillover effect may vary slightly on weekends. The focus and tone of national media greatly impact retail and institutional investors, respectively. We also notice that investors have become more optimistic in the post-pandemic era, and the share price plunge on the first day after the Chinese New Year 2020 has had a significant impact on national media coverage.

Media uncertainty and risk-taking

This study investigates the association between uncertain media tone and risk-taking measures that capture CEO risk-taking incentives, corporate investment, and financial policies. The study predicts that CEOs who attract greater uncertain media tone have more risk-taking incentives. We find a positive association between uncertain media tone and R&D expenditures and financial leverage, and a negative association between uncertain media tone and capital expenditure. Our results are robust to endogeneity concerns and further tests, and demonstrate the importance of uncertainty to executive decision-making. The study documents a potential missing link between uncertain media tone, CEO discretion, and firm risk-taking activities.

Media Tone and Stock Price Crash Risk: Evidence from China

Following the 2008 financial crisis, multiple studies have contributed to the research on stock price crashes. However, most of the studies on stock price crashes are from the corporate management perspective, focusing on factors such as the board’s character, the CEO’s power, the brand’s capital, and ESG performance. Few studies have taken external information, such as media coverage, into consideration. Meanwhile, in the era of 5G, internet media has witnessed exponential growth, heavily enhancing the speed of information transmission; this could possibly impact the future risk associated with stock price crashes. From this perspective, our study extends the coverage by investigating the relationship between internet media coverage and the potential risk of stock price crashes. Using a comprehensive dataset of the Chinese stock market from 2008 to 2021, we found that the optimistic (pessimistic) tones of internet media were positively (negatively) correlated with the future risk of crashes. These findings remained firm after accounting for winsorization, corporate governance control, firm fixed effects, and instrumental variable analysis. Further analyses showed that media tone impacts were more pronounced for firms with higher analyst coverage. Our study indicates that investors, especially retail investors, who are more easily influenced by internet media, should be more cautious about the increasingly favorable internet coverage of listed companies, which could result in a heightened future risk of stock price crashes. Moreover, regulators should inform investors when listed companies are experiencing more favorable internet coverage to minimize potential stock market fluctuations and investment losses for investors.

Translation of Traditional Chinese Crafts Culture in the New Media Environment: A Case Study of Subtitle Translation in Li Ziqi's YouTube Short Videos

Nowadays, the subjects of external communication are increasingly diversified, and China's new media forms of external communication are rich and varied. In contrast to the authoritative narrative style and tone of official media, short videos have emerged as an important medium for international communication in the new era. With characteristics such as fragmented content, entertainment value, popularity, and colloquial language, they have achieved significant dissemination effects on global social media platforms like YouTube. Therefore, more and more unofficial self-media figures are attempting to share unique Chinese stories and culture through short videos on YouTube, and Li Ziqi is one of them. Li Ziqi has amassed 17.6 million subscribers on YouTube, with a total of 128 videos published and over 2.9 billion views at the time of data collection (2023.07.02). Her short videos showcase her leisurely daily life in natural landscapes, diverse culinary culture, and traditional Chinese crafts culture, among other aspects of traditional culture. At present, Li Ziqi's "Traditional Crafts" series has become one of the important platforms for the external dissemination of Chinese traditional craft culture. This study takes the translation of the subtitles in four short videos from Li Ziqi's "Traditional Crafts" series on the YouTube platform as the research object. From the perspective of the new media environment, it analyzes the external communication of traditional Chinese craft culture in the new era and provides a summary of reflections.

Trade war, media tone and market reaction asymmetry

Purpose This study investigates the impacts of Chinese media reporting strategy (media tone) on the market performance of US-trade-intensive firms vs non-US-trade-intensive firms and the effect of media tone on the occurrence of good and bad news. Design/methodology/approach News texts were retrieved from nine major financial/economic media outlets. Lexical analysis and event study have been adopted to examine the impact of different types of news during the US–China trade frictions on Chinese firms. Findings The results show that US-trade-intensive firms vs non-US-trade-intensive firms exhibited different reactions to media coverage. US-trade-intensive firms care more about the governmental attitudes toward the trade war and potential policy supports implied in the official media reports than non-US-trade-intensive firms do. The return-chasing behavior hypothesis is supported by US-trade-intensive investors, and this effect is further enhanced when multiple releases occur on the same day. A higher media tone combined with intensified media releases significantly increases the volatilities of both US-trade-intensive and non-US-trade-intensive firms. Practical implications Information provided by this study helps the regulatory authorities to formulate measures to enhance investor confidence and better optimize resource allocation. Originality/value This study investigates the asymmetric effect of media tone on US-trade-intensive firms vs non-US-trade-intensive firms, which has not been examined, to the best of the authors’ knowledge, in the existing literature.

News Coverage of the COVID-19 Pandemic on Social Media and the Public's Negative Emotions: Computational Study.

Social media has become an increasingly popular and critical tool for users to digest diverse information and express their perceptions and attitudes. While most studies endeavor to delineate the emotional responses of social media users, there is limited research exploring the factors associated with the emergence of emotions, particularly negative ones, during news consumption. We aim to first depict the web coverage by news organizations on social media and then explore the crucial elements of news coverage that trigger the public's negative emotions. Our findings can act as a reference for responsible parties and news organizations in times of crisis. We collected 23,705 Facebook posts with 1,019,317 comments from the public pages of representative news organizations in Hong Kong. We used text mining techniques, such as topic models and Bidirectional Encoder Representations from Transformers, to analyze news components and public reactions. Beyond descriptive analysis, we used regression models to shed light on how news coverage on social media is associated with the public's negative emotional responses. Our results suggest that occurrences of issues regarding pandemic situations, antipandemic measures, and supportive actions are likely to reduce the public's negative emotions, while comments on the posts mentioning the central government and the Government of Hong Kong reveal more negativeness. Negative and neutral media tones can alleviate the rage and interact with the subjects and issues in the news to affect users' negative emotions. Post length is found to have a curvilinear relationship with users' negative emotions. This study sheds light on the impacts of various components of news coverage (issues, subjects, media tone, and length) on social media on the public's negative emotions (anger, fear, and sadness). Our comprehensive analysis provides a reference framework for efficient crisis communication for similar pandemics at present or in the future. This research, although first extending the analysis between the components of news coverage and negative user emotions to the scenario of social media, echoes previous studies drawn from traditional media and its derivatives, such as web newspapers. Although the era of COVID-19 pandemic gradually brings down the curtain, the commonality of this research and previous studies also contributes to establishing a clearer territory in the field of health crises.

구제역 발생에 따른 축산물 유통단계별 가격변화 분석

This study analyzed the effect of FMD on the prices of livestock products at each distribution stage. Through the sentiment analysis of FMD from 2005 to 2020, the Media tone index was used as a proxy variable to conduct VECM analysis. In particular, the long-term and short-term impact relationships were compared and analyzed, focusing on before and after the introduction of the Korea Animal Health Integrated System (KAHIS), which prepared the government’s systematic response system for epidemic prevention and control of livestock diseases. As a result of the analysis, after the introduction of the KAHIS, the positive media reports gradually increased in the media tone index on livestock epidemics. In addition, it was found that the adjustment of the livestock product distribution policy and food safety management system contributed to reducing the range of price fluctuations at each distribution stage.