Political connections and media slant

Shijun Guo, Xin Yu*, Robert Faff

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

Abstract

We examine the influence of political connections on media slant for a sample of Chinese listed firms. We find that firms with stronger political connections obtain more positive reports from major Chinese business newspapers. The association is more pronounced when firms are located in provinces with more government intervention and when the media are state-controlled (compared with market-oriented media). We further examine two explanations for the positive association between political connections and media slant. On the demand side, the firm management channel sees firms using their political connections to manage the relationship with the media for favorable reporting. On the supply side, the media intention channel has media outlets providing favorable reporting to connected firms to enhance their own relationship with the government. We find evidence supporting the firm management channel.

Original languageEnglish
Pages (from-to)58-80
Number of pages23
JournalInternational Review of Economics and Finance
Volume74
DOIs
Publication statusE-pub ahead of print - 12 Feb 2021

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