Research On The Influence Of Media Attention And Internal Control On Corporate Risk-Taking

Corporate risk-taking is related to the healthy development of corporates.Moderate risk-taking can promote the development of corporates,while excessive risk-taking may lead to difficulties.This study found that existing literature seldom considers the influence of external informal system when investigating the internal factors of corporate risk-taking,but in fact,external informal system can significantly change the risk preference of economic subjects.Therefore,the study of corporate risk-taking only from internal factors is still weak,and it should be combined with external factors.As an important external supervision mechanism,the governance role of the media has been confirmed by a large number of literatures.Relevant literatures mainly assume the western mature capital market and unbiased media reports as the premise.However,in the context of China's imperfect media environment and capital market system,the governance role of the media needs to be further explored.In reality,sensation-seeking media will bring market pressure to corporates,which will force managers to pursue short-term performance and cause corporates to take unnecessary risks.Meanwhile,positive and negative emotions of media have different impacts on corporates.In addition,as an important risk management mechanism of corporates,the role of media attention in corporates with different levels of internal control will be different.Therefore,based on the market environment of Chinese media,this paper aims to clarify the influence mechanism of media attention and internal control on corporate risk-taking,and discusses the moderating effect of internal control in the influence mechanism of media attention on corporate risk-taking,and further considers the heterogeneous influence of positive and negative media attention on corporate risk-taking and the moderating effect of internal controlBased on the data of Chinese a-share listed companies from 2008 to 2018,this paper constructs panel vector autoregression model from a dynamic perspective,and empirically tests the dynamic relationship between media attention,internal control and corporate risk-taking at different periods mainly through impulse response function,variance decomposition and granger causality test.The results show that:(1)In the whole sample,the influence of media attention on corporate risk-taking is not significant in the short term,but has a significant negative influence on corporate risk-taking in the long term.At the same time,internal control is helpful to reduce corporate risk-taking.(2)After distinguishing the level of corporate internal control,it is found that the effect of media attention in the short term leading to the increase of corporate risk-taking will only appear when the level of corporate internal control is low.(3)Further research finds that only negative media attention will lead to an increase in corporate risk-taking in the short term and a decrease in corporate risk-taking in the long term,while positive media attention will lead to a decrease in corporate risk-taking in the long and short term.This indicates that compared with positive media attention,negative media attention will exert more market pressure on corporates in the short term.Meanwhile,positive media attention will bring positive image supervision to corporates rather than negative public pressure.(4)Positive media attention will not lead to an increase in risk-taking when the level of internal control is high or low,while negative media attention will only lead to an increase in risk-taking when the level of internal control is low.It shows that the regulating effect of internal control can restrain the market pressure mechanism of negative media attention rather than the supervision mechanism of positive media attention.In general,the influence of media attention conforms to the market pressure mechanism in the short term and effective supervision mechanism in the long term,and the internal control helps to restrain the risk-taking raised by the market pressure mechanism.The theoretical significance is to expand the internal and external influence mechanism of corporate risk-taking,the practical significance is to improve the media regulatory environment,improve the efficiency of internal control management and the construction of corporate risk management.