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ABSTRACT This article examines the association between media attention and debt financing through a number of channels associated with information asymmetry reduction and whether this relationship changes with cross-country institutional… Click to show full abstract
ABSTRACT This article examines the association between media attention and debt financing through a number of channels associated with information asymmetry reduction and whether this relationship changes with cross-country institutional environment characteristics. Focusing on a comprehensive international dataset, we find that overall media coverage is negatively related to firm leverage levels. Media-focused variables directly associated with information asymmetry levels, including press-initiated news, non-financial news, and the extent of positive news sentiment, are also negatively related to firm leverage ratios. Furthermore, the country-level institutional environment provided a substituting rather than legitimizing influence on the relationship between media news coverage and firm financing decision-making.
Journal Title: Emerging Markets Finance and Trade
Year Published: 2021
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