Business failure and mass media: An analysis of media exposure in the context of delisting event

TY - JOUR

T1 - Business failure and mass media

T2 - An analysis of media exposure in the context of delisting event

AU - Sheng, Jie

AU - Lan, Hao

PY - 2018/2/1

Y1 - 2018/2/1

N2 - It is understood that the mass media are a pervasive force in shaping the public's perceptions. This paper incorporates agenda-setting theory to explore whether and to what extent that the mass media can signal business failure. In an analysis of news coverage relating to Chinese underperforming listed firms over the period 2006–2017, it is demonstrated that firms whose stocks are put under “special treatment” status due to consecutive annual losses experience (*ST) greater news volume and lower news sentiment relative to other firms in the quarter in which the “delisting risk warning” announcements are made. Furthermore, *ST firms which are eventually delisted have a greater volume of news than other *ST firms, but we find no evidence that the sentiment of news relates to termination of listing. Our findings offer insights into the informativeness of the mass media and their agenda-setting effects in the business failure context.

AB - It is understood that the mass media are a pervasive force in shaping the public's perceptions. This paper incorporates agenda-setting theory to explore whether and to what extent that the mass media can signal business failure. In an analysis of news coverage relating to Chinese underperforming listed firms over the period 2006–2017, it is demonstrated that firms whose stocks are put under “special treatment” status due to consecutive annual losses experience (*ST) greater news volume and lower news sentiment relative to other firms in the quarter in which the “delisting risk warning” announcements are made. Furthermore, *ST firms which are eventually delisted have a greater volume of news than other *ST firms, but we find no evidence that the sentiment of news relates to termination of listing. Our findings offer insights into the informativeness of the mass media and their agenda-setting effects in the business failure context.

KW - Mass media

KW - Media exposure

KW - Business failure

KW - Agenda-setting

KW - Delisting

KW - Sentiment analysis

U2 - 10.1016/j.jbusres.2018.01.055

DO - 10.1016/j.jbusres.2018.01.055

M3 - Article

SN - 0148-2963

JO - Journal of Business Research

JF - Journal of Business Research

ER -