An Analysis Of The Influence Of Negative Media Coverage On Investment Efficiency Of Chinese Family Hoiding Listed Companies

The literature on factors affecting the investment efficiency have appeared constantly, but mainly concentrated on company’s internal environment’s effects. Media’s role in monitoring corporate governance cannot be ignored, and the studies relating with media coverage suggests that media coverage, in particular, the negative media coverage can affect company behavior. In order to enrich the relevant theories of media coverage and corporate governance, based on the related theory of investment efficiency, this paper summarizes the existing literature of corporate governance role of media, investment efficiency and its influencing factors. With the sample of 2014 A-share family holding listed companies in Shanghai and Shenzhen This paper systematically studies the relationship among media coverage, managers’characteristics and investment efficiency from different angles, to seek the functional mechanism of corporate external factors. First, this paper analyzes the descriptive statistics and Spearman correlation coefficient of each variables. Then, we verify research hypothesis by using multiple regression analysis, and analyzes the different influence of media coverage on family companies’investment efficiency when the managers’ characteristics are different. Next, this paper makes a robustness test to verify research hypothesis by eliminating optimal investment samples. At last, this paper forecast the economic consequences of improving investment efficiency.Research results show that, (1) Negative media coverage is helpful to improve the investment efficiency of listed family corporation, investment efficiency of companies with negative media coverage is obviously higher in companies without negative media coverage. (2) The number of negative media coverage has a significant negative correlation with the investment efficiency of listed family corporation (3) Negative media coverage supervision is effective both in companies experiencing underinvestment and overinvestment. (4) The impact of negative media coverage on investment efficiency is significant when manager is a professional manager, but not notable when manager isn’t a professional manager. (5) The improvement of investment efficiency is helpful to promote companies’performance. Results indicate that under the economic transformation in China, as a kind of external governance mechanism, media has certain functions in governance.