Media Attention, Earnings Management And The Cost Of Capital

Cash holding is related to the choice of investment and development strategy of enterprises.The ways of obtaining funds are divided into internal financing and external financing.Compared with the two ways,the funds of internal financing raised are less,which can not meet the development of enterprises;The external financing can obtain a large amount of funds.Therefore,the final focus on equity financing and debt financing.How to control equity and debt capital cost to maximize the effectiveness of these two kinds of financing,is of great importance for economic development,especially in the context of high energy consumption,high pollution and financing difficulties in heavy polluting industries.This paper selects the annual data of A-share listed companies in heavy polluting industries from 2009 to 2018 as the research object to study the influence of media attention on the cost of equity capital and debt capital,as well as the influence mechanism of accrual earnings management and real earnings management.The media attention is divided into total media reports,positive and negative media reports in terms of quantity and nature.According to the intermediary inspection process,the step by step regression coefficient test method is used to conduct empirical tests on the collected and summarized data,and a series of robustness tests are adopted to ensure the explanatory power of the results in this paper.The empirical results of this paper show that:(1)Heavy polluting industries that receive frequent media attention can reduce the cost of equity capital and debt capital of enterprises;(2)After distinguishing the nature of media reports,the more positive media reports,the lower the cost of debt capital,but the lower the cost of equity capital is not obvious;Negative media reports can promote enterprises to improve their behavior and produce good economic consequences.(3)The masked effect of accrual earnings management is obvious in the relationship between media attention and the cost of equity capital and debt capital.Real earnings management plays a mediating role in the relationship between media attention and the cost of debt capital,but the mediating effect is not obvious in the relationship between the cost of equity capital.In other words,under the influence of media,the management of heavily polluting industries will adopt less harmful accrual earnings management behavior in the face of operation and performance pressure to obtain financial support and reduce the cost to be paid.At the same time,under the pressure,the harmful real earnings management behavior is somewhat converged,the potential risk is reduced,which provides an opportunity to save the cost of capital.