Study Of The Impact Of Media Misrepresentation On The Economic Consequences Of Business

With the development of the information age,the power of the media has made it occupy an important position in the capital market,and its intervention on enterprises has had a profound impact.Most of the studies on media attention generally agree that it can alleviate information asymmetry between enterprises and households,governments and enterprises,increase the transparency of corporate information,and have a positive impact on the corporate information environment.As a result,the media focus on external corporate governance is gaining prominence.At the same time,however,there is also some research suggesting that the governance effects of media coverage have diminished.The profit-seeking nature of the media can cause them to pursue only market hot spots,select their reporting positions tendentiously,and even distort the facts to produce inaccurate reports,making the media monitoring effect much less effective.Although literature studies on the impact of media on stock price fluctuations exist,they are basically about the impact of reporting on established facts,and do not give the necessary reasonable attention to the specific impact of false rumors such as misrepresentation on corporate economy.Therefore,it is important to strengthen the research efforts on the impact of misreporting on enterprises,especially on the economic value of enterprises,and to harvest more convincing reference data,so as to maintain a fair public opinion environment,alleviate information asymmetry,and evaluate more objectively and accurately the economy of enterprises that have been misreported,which is a better reference value for the external governance of enterprises.Due to the complexity of the process of media misreporting,the mechanism and path of its impact on corporate economy are difficult to reveal through large-sample empirical studies,and it is easy to overlook the key elements of misreporting.Therefore,this paper elaborates the social flow waterfall theory to lay the foundation for the communication effect of misreporting,explains the market reaction and economic consequences of i FLYTEK after being misreported with principal-agent theory,and analyzes the transmission mechanism of the economic consequences of media misreporting on enterprises from five aspects based on stakeholder theory:media,investors,enterprises,analysts,and government.In the specific case study,qualitative and quantitative analyses of the impact on the economic consequences are conducted through market reactions and financial indicators.The research results show that the media achieves the impact on enterprises under three paths: reputation mechanism,market mechanism,and administrative mechanism.The media misreporting destroys the social reputation of i FLYTEK,and the short-window CAR,long-window BHAR,operating performance,and analyst forecast accuracy all decrease,leading to serious economic consequences.In addition,the market value does not improve immediately in the short term after immediate disinformation,indicating that media misrepresentation has a long-term ruinous impact on companies.The case studies in this paper help government agencies,the media industry and enterprises to gain insight and take proactive measures to improve various mechanisms,and hopefully shed light on effectively preventing the serious adverse effects caused by media misreporting,remediating the media reporting environment and improving its external governance role.