Do media connections help? Evidence from IPO pricing in China

This study examines how social connections between media executives and firms affect initial public offering (IPO) pricing using manually collected Chinese data. We find media-connected firms receive more frequent and more positive coverage than their unconnected peers, resulting in reduced IPO underpricing. However, media-connected firms have worse post-IPO market performance. Although media-connected firms have better pre-IPO accounting performance, they conduct more earnings management under the cover provided by their connected media. Additional results show that the negative effect of media connections on IPO underpricing is more pronounced for media that are not controlled by the central government and are based in the same city as the firm. It is also more pronounced for firms with less institutional ownership and non-state-owned enterprises. Our results remain valid after various robustness tests, such as alternative proxies for IPO underpricing, eliminating alternative hypotheses, matching analysis, instrumental variable analysis, as well as placebo tests. Collectively, our findings suggest that media connections compromise IPO pricing efficiency.     

COVID-19 and changes in content usage behavior: The case of South Korea

This study examines changes in content usage time due to the COVID-19 pandemic in South Korea using Korean Media Panel data for the period 2011–2020 and explores the reasons for these changes. This study focuses on four principal contents: television programs, movies/videos/user-created content, traditional telecommunication services, and chatting/messenger/social network services. The empirical results indicate an increase in usage time for the four principal contents, as well as total content usage time because of the pandemic. The results also show that average Korean people stayed longer at home after the onset of the pandemic, leading to an increase in the time spent on all the principal contents, except for traditional telecommunication services, as well as an increase in total content usage time. Furthermore, this study suggests that whereas the effect of the pandemic on television program viewing time was mainly attributable to changes in time spent at home because of the pandemic, the effect on other contents was mainly caused by non-location-related factors. This study predicts changes in content usage time after the end of the pandemic and provides strategic suggestions.     

Organizational legitimacy of emerging multinational enterprises: An individual perspective

Drawing on the information processing perspective from psychology, the study builds and tests a conceptual model to explain how the country-of-origin image (COI) and media coverage are associated with the organizational legitimacy of emerging multinational enterprises (EMNEs), and how the relationships are moderated by the education level of individuals in a developed host country. This study investigates the relationships by highlighting the multidimensional nature of these concepts. Our findings suggest that affective COI is positively associated with both pragmatic and sociopolitical legitimacy, economic COI is positively associated with pragmatic legitimacy, and political COI is positively associated with sociopolitical legitimacy. The findings also demonstrate that media influence legitimacy; however, the extent to which media influence legitimacy depends on individuals’ education levels. These findings advance our understanding of organizational legitimacy and its antecedents, providing new insights into strategies for building legitimacy in foreign countries.     

How do the media scrutinise central banking? Evidence from the Bank of England

Central bank independence has raised questions of accountability ever since its global diffusion in the 1990s, and especially since the financial crisis. Yet, whilst the literature on central banks’ legislative oversight has expanded, the role of the media as account holders has been left largely unexplored. We assess media scrutiny by using an original dataset of news articles about the Bank of England published between 1997 and 2020, and by analysing the relationship between central banking outcomes and scrutiny in the form of evaluative and negative coverage of the Bank. We find that the variation in such coverage can be traced back to policy outcomes, but the association is largely confined to the post-crisis period. The findings support a view of the media as instrumental in central bank oversight, but also show the limits of this form of accountability.     

Tournament-based incentives and media sentiment

We find that promotion-based tournament incentives of executives are positively associated with firms’ media sentiment. This effect is more pronounced among firms with greater need for media favourability, captured by higher information opacity, lower analyst coverage, lower industry homogeneity, lower investment sentiment and lower managerial ability. Furthermore, we identify better financial performance and higher corporate branding as two channels through which tournament incentives can enhance a firm’s positive media sentiment. Our results are also robust to two quasi-natural experiments affecting promotion-based tournaments – (a) an exogenous CEO turnover due to health issues or sudden CEO death, and (b) the implementation of Say-on-Pay (SOP) law. Overall, our findings indicate that tournament-based incentives encourage a firm’s executives to showcase their skills to broader stakeholders, which consequently increases a firm’s media image.