Media Coverage,Earnings Management And The Cost Of Corporate Debt

In recent years,media coverage has attracted public attention to hot social issues.With the maturity of the Internet,the cost of information dissemination has become lower,the scope of information has become wider,and the time efficiency of information has become stronger.As a result,media coverage has even affected different aspects of economy of our society.However,as the main body of the market economy,enterprises are still constrained by debt financing.When an enterprise is covered by the media,will this have an impact on its cost of debt?What’s more,what is the mechanism of this impact?This paper takes media coverage as the start of research,utilizes information asymmetry theory as the basis,and studies the impact of media coverage on the cost of corporate debt and its mechanism.This paper selects the data of A-share listed companies from 2011 to 2020 in China as the research sample,based on the functions of media,including information transmission,supervision and governance,to study the impact of media coverage on the cost of corporate debt,and whether accrued-based and real earnings management play the role of mediation.The research in this paper shows that:(1)media coverage helps reduce the cost of corporate debt,and non-negative media coverage helps reduce the cost of corporate debt;(2)media coverage affects the cost of debt by limiting accrued-based and real earnings management;(3)non-negative media coverage affects the cost of debt by limiting accruedbased and real earnings management.The above conclusions still hold after a series of robust tests.In further research,this paper finds that:(1)Internet media coverage has reduced the cost of corporate debt,but only real earnings management has played an intermediary role;(2)In state-owned enterprises and non-state-owned enterprises,media coverage both plays a role in reducing the cost of debt,while real earnings management plays an intermediary role;however,accrued-based earnings management only plays an intermediary role in the non-state-owned enterprise group;(3)Consider the influence of individual constraints of enterprises,the study finds that the reducing effect of media coverage on the cost of debt has been more significant in the enterprises with stronger financing constraints;(4)Considering the impact of regional constraints,the study finds that the reducing effect of media coverage on the cost of debt has been more significant in the enterprises that are in the regions with a lower degree of marketization.The conclusion of this paper theoretically enriches the influencing factors of corporate debt cost,and expands the path and mechanism of the impact of external governance on corporate debt cost.Under the realistic situation of enterprises with a high financing cost,this paper has practical significance for exerting the role of media,restricting earnings management of listed enterprises,improving the quality of accounting information,and reducing the cost of debt.