An Empirical Study On The Impact Of Negative Media Coverage On The Stock Price Volatility Of Listed Companies

The media,as the bridge of information dissemination in the capital market,is responsible for digging,collecting,processing and transmitting information.At present,since the development of science and technology,the traditional media and emerging communication platform is going to be mature.In effect,television,radio,newspaper and the internet have become channels where the young generation communicates with.As for investors,it is convenient to collect the full range of valuable information through financial media coverage,then making investment decisions rationally and decisively.According to the relative literature,the importance of the media is exceeding the intra industry.Meanwhile,there are increasingly more global scholars who contribute to the media supervision of the capital market.The study of this system analyzes the impact of media supervision on the stock price fluctuation situation and the theoretical basis,the domestic and foreign literature material on the related fields of comprehensive analysis and summary,and put forward a new perspective of in-depth research as the starting point.In this paper,45 listed companies in the list of the top ten blacklist enterprises from 2013 to 2016 were selected as samples.The negative effects of the media attention on the stock price of the listed companies are studied on the basis of 276 negative reports.First of all,the paper used the event study method to calculate the abnormal returns of the stock market in the window period of Sample Firms.Secondly,different media has different characteristics,which leads to various effective mechanisms and effects for listed companies.Furthermore,in the reason of strengthening media reports' influences,this report adopts exogenous variables of media attention,the media has been divided in scopes of report dimensions as follows,media reports(number),media coverage degree(in surface and in deep),media reports content(serious violation and general infringement).This paper use the method of multiple regression to empirical analysis the short-term market reaction of listed companies in relation to negative media coverages.Throughout methodologies of event study,pared test and regression analysis,two outcomes result from empirical study.Firstly,the stock price of sample corporations was fluctuating as the media reported negatively,it also has significant negative correlation between the bad coverage and listed companies' share price.Secondly,the breakdown of negative information on the media indicates that the deeper serious violations of the negative report led to a stronger market reaction,as well as exacerbated the reduction of the share price of listed companies.The empirical analysis of listed companies in this report call on the reputation mechanism improvement,to constantly beautify the social image and responsibility,to complete the governance mechanism of information disclosure in the firm,to increase supervision of listed companies by the government departments.At the same time,the empirical results of this paper provide a reference for the internal and external stakeholders of the listed companies,the government and other regulatory authorities and the media to implement the relevant decisions.