Media?Environment Uncertainty And The Cost Of Equity Capital

The concept of cost of equity capital has been receiving much attention in the field of corporate finance research.It plays an important role in management's business decisions and investors' investment decisions.Whether it is academia or practice,the research results related to the cost of equity capital are endless.In recent years,with the continuous development of China's economy,society,and culture,the media industry has also flourished.As the carrier of information dissemination,the media has played more and more roles in the economic society.Nowadays,in addition to the transmission of information,the media is more about exercising the "fourth right" that has a supervisory role in all sectors of society.Scholars have also focused on the external factors that affect the cost of equity capital on media reports.From the perspective of traditional media reporting and online media reporting,scholars have conducted empirical research on the relationship between the number of media reports and the cost of equity capital.There has been no research involving the use of environmental uncertainty as a moderator to study the relationship between media reports and corporate equity financing costs.Therefore,after reviewing and combing relevant literature at home and abroad,this paper selects the model suitable for this study to estimate the explanatory variables(cost of equity capital)of the paper,and whether or not to report,the number of reports,and the nature of the report as an alternative to media reporting.An empirical study of the relationship between media coverage,environmental uncertainty,and corporate financing costs.According to the empirical results,the paper intends to answer the following three questions:whether the media reports on listed companies will reduce the company's financing costs;how the media coverage(quantity,nature)and the cost of equity capital of the company are related;whether the level of uncertainty in the company's environment will Influence media reports on the relevance of cost of equity capital.In order to explore the above issues,this paper will study the impact of non-financial external factors and environmental uncertainties on the cost of equity capital of listed companies based on information asymmetry,corporate governance,and the related theories of risk and profit matching.Taking all listed companies in Shanghai and Shenzhen cities as the research samples from 2012 to 2016,univariate T-tests,F-tests,and multivariate regression methods were used to empirically test and robustly test the hypotheses proposed in the article.Empirical studies have found that:(1)Listed companies receiving media reports have lower costs of equity capital than listed companies that are not concerned by the media,and the more frequently listed companies are reported by the media,the lower their equity financing costs.(2)The media's negative reports on listed companies will increase the company's equity capital costs.(3)When the external environment of a company is complex and unstable,the cost of its equity capital is higher.(4)The effect of media reports on the reduction of the cost of equity capital has weakened with the increase of environmental uncertainty.This article explores the influencing factors of listed company's equity financing cost from the perspective of media,enriches the media's relevant content of corporate governance,and also broadens the perspective of researching the cost of equity capital.Based on the research conclusions,this paper puts forward some suggestions for the development of China's media industry and capital market,with a view to make contribution to regulating the capital market in China,promoting the development of the media industry,reducing the cost of financing for enterprises,and strengthening investor protection.