Does the media spotlight burn or spur innovation?

Lili Dai (), Rui Shen () and Bohui Zhang ()
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Lili Dai: University of New South Wales
Rui Shen: Chinese University of Hong Kong
Bohui Zhang: Chinese University of Hong Kong

Review of Accounting Studies, 2021, vol. 26, issue 1, No 10, 343-390

Abstract: Abstract We examine the effect of media coverage on firm innovation. Using a comprehensive sample of corporate news coverage and patenting over the period from 2000 to 2012, we find a negative relation between media coverage and firm innovation. We further document the two offsetting economic mechanisms underlying the impact of media coverage on innovation: the media’s role of short-term pressure on managers relates negatively to innovation, while its role of mitigating financial constraints is positively associated with innovation. Our findings provide new insights into the effect of news coverage on firms’ long-term growth.

Keywords: Media coverage; Firm innovation; Managerial myopia; Financial constraint (search for similar items in EconPapers)
JEL-codes: G14 G32 O31 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (36)

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DOI: 10.1007/s11142-020-09553-w

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