Does Media Coverage Affect Company Financial Performance And Innovation Performance?

With the increasing independence and competitiveness of the media market,more and more corporate governance cases have connected to media.For example,the outbreak of Enron scandal in 2001 is a follow-up report from journalists.The exposure of expired lion food sales in Britain is also due to the media;not only abroad,in China,the Sanlu milk powder incident and the recent Maotai scandal are also known to the public through the media.Nowadays media plays a more and more significant role in the external supervision of companies.For this reason,this paper takes China's listed companies from 2004 to 2018 as the research sample,discusses the impact of media on corporate's ROA and innovation;Secondly,this paper explores the mechanisms by which media reports affect company performance,including Reputation Mechanism(media influences enterprises by influencing managers' reputation),Administrative Intervention Mechanism(media reports cause administrative intervention to correct enterprises' behavior),and Capital Market Mechanism(media reports influence enterprises' operation by influencing enterprises' market performance);Finally,this paper discusses the differences of media influence under different external environment(media classification,state-own or not,market information environment,industry).In general,we got following conclusions:First,the impact of media attention(total amount of media reports)and negative pressure brought by media reports on enterprises(number of negative reports)cannot be generalized.Media attention is positively correlated with enterprise performance and innovation degree,while negative pressure is negatively correlated with enterprise performance and innovation degree.Moreover,in the past,the media research mostly ignored the impact of the content of the report.In this paper,the control variables of the content of the report(key report,refers to the report that has a significant impact on the public)are added,so the results are more convincing.Secondly,the reputation mechanism is not fully embodied in the managers and company level;And the administrative intervention mechanism and market mechanism exist.thirdly,the heterogeneity test results show that there is no significant difference between the classification of media;but have difference vary the nature of enterprises,information environment and industry competition situation.Under the media attention and negative pressure,non-state-owned enterprises are more significantly affected,companies with poor information environment are more significantly affected,and competitive industries are more significantly affected.