Online social networks, media supervision and investment efficiency: An empirical examination of Chinese listed firms

Xiaoping Yang, Dongmei Cao, Panagiotis Andrikopoulos, Zonghan Yang and Tina Bass

Technological Forecasting and Social Change, 2020, vol. 154, issue C

Abstract: Prior literature suggests that media reports acting as external supervision improve information transparency and corporate governance leading to increased investment efficiency. This study empirically tests this hypothesis in the context of online social networks by investigating the combined effects of online social networking and media reports on investment efficiency using a sample of Chinese listed firms. Our results show that the interaction of media reports and Tobin's q ratio is negatively related to corporate investment efficiency. However, the introduction of online social networks turns this relationship from a negative to a positive and statistically significant one. The combined factors significantly increase investment efficiency in non-SOEs (State Owned Enterprises) but not in SOEs. We provide evidence that online social networking effectively mitigates the negative effect of media supervision on investment efficiency, further advancing knowledge of the link of external supervision and corporate governance.

Keywords: Online social networks; Media supervision; Investment efficiency; China; Sina Weibo (search for similar items in EconPapers)
JEL-codes: G30 G31 G34 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:154:y:2020:i:c:s0040162519309503

DOI: 10.1016/j.techfore.2020.119969

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