The Media Bias To Release Negative News,Financial Friction And Company Performance

The media bias to release negative news exists widely,media have the tendency to release negative news when compared with positive news,in order to cater to readers' preference,gain the advantages in market competition and obtain benefits from it.This kind of bias would have effects on the operation and performance of company in different ways.From the point of company finance,the media bias to release negative news would influence the information quality in capital market.In microscopic view,investors would be more sensitive to negative news,which makes investors' behavioral decision making influenced by the media bias to release negative news.Then,the financial friction suffered by company would change,which directly relates to the development of company.Meanwhile,the company is also influenced by government economic intervention as well as the scale and the holding character of company.The research on media bias to release negative news and it's effect on economy is related to the new challenges and new opportunities that company faced with in economic transition period.This paper has a research on 142 listed companies in Shanghai stock market from 2011 to 2015,based on theories including information economics ? financial management and behavior finance,this paper focus on two questions:(1)from the view of information environment,does the media bias to release negative news have a effect on company performance with the mediating effect of financial friction? And does government economic intervention which is as a exogenous factor play a role?(2)do endogenous factors like company scale and holding character influence the relationship between the media bias to release negative news and company performance?On the one hand,this research shows that the media bias to release negative news would cause damage to listed company performance,and the media bias to release negative news would intensify the financial friction,which has a partial mediate effect in the relationship between the media bias to release negative news and company performance.On the other hand,the government economic intervention moderates negatively the relationship between the financial friction and company performance,the stronger the government economic intervention is,the weaker the damage to company performance caused by financial friction would be.Besides,company scale moderates positively the relationship between the media bias to release negative news and company performance,the greater the company scale is,the greater the damage to company performance caused by the media bias to release negative news would be.The smaller the company scale is,the weaker the damage to company performance caused by the media bias to release negative news would be.What's more,holding character of company moderates positively the relationship between the media bias to release negative news and company performance,compared with state-owned holding company,the media bias to release negative news cause greater damage to non-state-owned holding company performance.The innovations of this research lie in(1)combining information economics?financial management and behavior finance,establishing conceptual model according to inner links within variables,which makes the raising of research questions become more logic.(2)From the viewpoint of the media bias to release negative news,broadening the existing research,coming up with a new research approach.Based on the research conclusions,this paper provides these advices for dealing with the problems resulted from the media bias to release negative news:(1)media should improve sense of social responsibility,offer professional analytical criticism,release news in an exact and objectively way,make the public get effective information.(2)Strengthening legislative institution to supervise and make external restriction for media bias.Establishing third-party regulation mechanism for the media bias to release negative news and broadening information channel to reduce the information asymmetry in capital market,to improve the information environment.(3)Investors should improve ability of recognizing information.It's important to lead investors setting up correct investment conception,to reduce their non-rational investment behaviors resulted from cognitive bias.(4)Broadening the financing channels for middle and small-sized enterprises by policy supporting,optimizing financing environment and reducing financial friction they faced with,to facilitate their development in economic transformation period.