The Role Of The Media In Corporate Governance:Can Media Attention Influence Corporate Tax Avoidance?

In the age of exploration of information,there seemingly appears a new leader,�media�,that influence the decision of corporate invisibly.Empirical evidences show that the pressure of coverage plays an important role in corporate governance,having impact on the behavior of corporate,such as earning management,social responsibility,internal controls,organization performance,agency costs,capital costs,audit charge and so on.However,there is few scholars study on the impact of media coverage on the behavior of corporate tax avoidance.Based on such situation,this paper focuses on the problems from three perspectives.The first one is whether media coverage would influence the behavior of corporate tax avoidance or not.If so,such kind of effect is positive correlation or negative correlation.Secondly,for the classification of media coverage,financial information article and non-financial information article,which kind of article is the real factor that influences the behavior of corporate tax avoidance? Thirdly,how does the media coverage influence the corporate tax avoidance?Based on the data of Chinese A-share listed companies from 2008 to 2013,my evidence shows that the more media coverage the higher level of tax avoidance.Furthermore,in this paper,the articles are divided into financial information and non-financial information by texture analysis.I find that the level of corporate tax avoidance would be higher if the media coverage from financial perspective is more,while the relationship between non-financial articles and corporate tax avoidance is not significant.In addition,I also find that media coverage contributes to reduce the asymmetric information between shareholders and managers,and between large shareholders and small shareholders,mitigating the first kind of agency problem and the second kind of agency problem.Thus we could analyze the impact of media coverage from asymmetric information and multiple agent theory.The contribution of this paper is from three aspects as following: firstly,this paper provides direct empirical evidence on the research of corporate tax avoidance behavior based on the media coverage,and has important supplementary function to the current academic literature about the influence factors of tax avoidance behavior.Secondly,this paper divide the articles into financial article and non-financial article from the perspective of the content and nature of news to study the company's financial behavior,the expanding the research perspective of media coverage.Thirdly,this paper summarizes the previous literature.Basing on the two perspectives,information asymmetry and the double agency theory,this paper discusses the impact of media coverage on the corporate tax avoidance behavior,which provides a more comprehensive research perspective.Therefore,the conclusion of this paper shows that the media coverage can improve the corporate governance,and promote the company's tax avoidance behavior,which is beneficial to the maximization of shareholders' wealth.Such conclusion can help us to have a better understanding of the role of the media in corporate governance,and the importance in the capital market.For the listed companies,the media coverage raises a new higher requirement of how to deal with the public relation.Only in the perfect corporate governance,the company can strictly implement the tax policy,making the largest shareholder wealth.For the regulatory authorities,how to regulate the media coverage so that the media can correctly play the role of public opinion,and create a good system environment is particularly important.