Media Coverage and the Cost of Debt

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

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Original languageEnglish
Pages (from-to)429-471
Journal / PublicationJournal of Financial and Quantitative Analysis
Volume55
Issue number2
Online published8 Jan 2019
Publication statusPublished - Mar 2020

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DOI

DOI
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Link to Scopus https://www.scopus.com/record/display.uri?eid=2-s2.0-85059703195&origin=recordpage
Permanent Link https://scholars.cityu.edu.hk/en/publications/publication(b0c2dd0f-d2e2-41d0-b15c-4dd1dd6b5796).html

Abstract

This paper investigates the relation between media coverage and offering yield spreads using a comprehensive dataset of 5,338 industrial bonds issued from 1990 to 2011. We find that media coverage is negatively associated with firms’ cost of debt. This association is robust to controlling for standard yield determinants, different model specifications, and endogeneity. We identify 4 economic channels through which media coverage influences the cost of debt: Information asymmetry, governance, liquidity, and default risk. Importantly, media coverage has an independent influence beyond the effects of these economic mechanisms and is not a proxy for other firm attributes.

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Publication fingerprints text

100
Media Coverage Keyphrases
100
Cost of Debt Keyphrases
100
cost INIS
66
yields INIS
66
economics INIS
66
Economics Economics, Econometrics a...
33
information INIS
33
asymmetry INIS
33
risks INIS
33
specifications INIS
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Citation Format(s)

[ RIS ] [ BibTeX ]
Media Coverage and the Cost of Debt. / Gao, Haoyu; Wang, Junbo; Wang, Yanchu et al.
In: Journal of Financial and Quantitative Analysis, Vol. 55, No. 2, 03.2020, p. 429-471.

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review