Newspapers and Parties: How Advertising Revenues Created an Independent Press

Maria Petrova

American Political Science Review, 2011, vol. 105, issue 4, 790-808

Abstract: Media freedom strongly inhibits corruption and promotes good governance, but what leads to media freedom? Do economic development and higher advertising revenues tend to make media outlets independent of political groups' influence? Using data on nineteenth-century American newspapers, I show that places with higher advertising revenues were likelier to have newspapers that were independent of political parties. Similar results hold when local advertising rates are instrumented by regulations on outdoor advertising and newspaper distribution. In addition, newly created newspapers were more likely to enter the market as independents in places with higher advertising rates. I also exploit the precise timing of major changes in advertising rates to identify how advertising revenues affected the entry of new newspapers. Finally, I demonstrate that economic development, and concomitant higher advertising revenue, is not the only reason that an independent press expands; political factors also played a role.

Date: 2011
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Working Paper: Newspapers and Parties: How Advertising Revenues Created an Independent Press (2009)
Working Paper: Newspapers and Parties: How Advertising Revenues Created an Independent Press (2009)
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