Topic：The Blackmail Effect of Media: Evidence from Chinese Firms

Time: 10:30-12:00, November 15, 2019 

Venue: 1620, Rear Main Building, Beijing Normal University 

Host: Hao Ying, Professor, School of Economics and Business Administration, Beijing Normal University

Abstract

Media has its bright side by bringing corporate actions under the spotlight and serving as a watchdog for external corporate governance. However, as a profit-driven entity, media could also exhibit some dark side in pursuing their own interests. We investigate the dark side of media using a unique dataset of media reports on Chinese firms. Specifically, we categorize media reports into negative and non-negative tunes and examine media uses negative reports as threat to blackmail firms for higher corporate Public Relation (PR) expenditure. We find that lower PR spending is associated with more negative media coverage, suggesting the blackmail effect by media. This result is especially pronounced in non-SOEs, implying that the implicit government guarantees in state-owned enterprises (SOE) could potentially mitigate media blackmail. Further, we compare the impacts of market-oriented media versus government-controlled media, and document that the blackmail effect from both government-controlled media and market-oriented media is only evident in non-SOE firms. Taken together, this paper enriches the literature on media roles by documenting the media’s blackmail inclination to non-SOEs in China.

Keywords: Media; News coverage; Implicit government guarantees; Frauds; PR expenditure

About the Speaker:

Ying Qianwei is professor and director of The Department of Accounting and Corporate Finance, Business School, Sichuan University. He is the candidate for national High-end Accounting Talents (academic) reserve, candidate for Sichuan Academic and technical leader reserve, candidate for "Double Hundred Talents Project" of Sichuan University, candidate for Young Outstanding Talents cultivation of Sichuan University, Visiting Scholar at MIT Sloan School of Management, Foster School of Business, University of Washington, and Carlson School of Management, University of Minnesota. He is the Evaluation expert of National Natural Science Foundation of China, Evaluation expert of Academic Degree Center of Ministry of Education, evaluation expert of accounting senior title of Sichuan Province, editorial member of "Financial Science" magazine. He has won the Social Science Outstanding Achievement Award of Sichuan Province, the first prize of Future Outstanding Scholar award of Sichuan University, tang Lixin Outstanding Scholar Award of Sichuan University, Outstanding Teacher Award of Sichuan University, and so on. He has published more than 50 papers (including 14 SSCI papers) on Management and Organization Review (SSCI) Urban Studies (SSCI)  Accounting and Finance (SSCI), Journal of Contemporary China (SSCI),   More than 50 papers have been published in management World, Journal of Management Science, Financial Research, World Economy, Statistical Research, Nankai Management Review and other well-known journals at home and abroad, and have been reprinted by Renmin University of China Photocopy Materials and China Social Science Abstracts.