Assessment of Online Media’s Impacts on Corporate Governance: Sentiment-Centric Media Coverage Indexing


Student thesis: Doctoral Thesis

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Award date13 Nov 2018


With the development of information techniques, online media news, such as online newspaper, reports, and business press, provide massive amounts of information to the public every day. Through various online media, information is aggregated and communicated to individuals and organizations, affecting the public’s perception in many aspects. However, previous studies have leveraged various media indicators and generated inconsistent results, which are hard to interpret for relevant stakeholders. Thus, the first research question raised in this thesis is how to generate a comprehensive media indicator to quantify the influence of online media news on the public’s perception. To resolve this question, this research constructs a unified index, the Media Coverage Index (MCI), which identifies the influence of online media and provides a better framework for studying the role of online media. Following a design science framework, this dissertation develops the MCI based on the magic bullet theory and the heuristic-systematic model. The MCI considers news relevance, news volume, news sentiment, and the influence of media channels.

Online media news may influence the public’s perception of target information. However, prior studies have not reached a consensus on this point. Some researchers have indicated that positive online news is an essential social force that will positively influence group activities. Others have maintained that only negative news can push information receivers to change or have claimed that online media news has little influence on organizations in many contexts. Moreover, decision-makers, such as policymakers and investors sometimes make erroneous decisions or predictions based on inaccurate perceptions of media news. Therefore, the second research question in this dissertation is whether online media news influences corporate activities and related strategies. To investigate the actual impacts of online media on corporate governance by using the MCI, this research chooses corporate governance as a research context to explore how media influences firm-level activities and strategies. This dissertation includes two studies as representative research contexts of corporate governance to investigate the role of online media in this area.

One study evaluates the effectiveness of the MCI compared with existing measurements of media coverage in the context of corporate innovation. The results show that the MCI performed better than other measurements in investigating the impacts of media coverage. Meanwhile, the results also reveal the impacts of online media coverage on corporate innovation by testing the relationships between the MCI and corporate innovations in listed companies. Specifically, the MCI has strong positive impacts on corporate innovation in non–state-owned companies and little effect on state-owned companies. Managers in non–state-owned companies are more sensitive to related media news as more media exposure and positive reports could bring more benefits from the public, such as a good organization profile and personal benefits.

The other study applies the MCI to explore the impacts of online media news on corporate tax aggressiveness. It investigates the relationship between the MCI and corporate tax aggressiveness in listed companies. The results show that online media news can restrain executive tax aggressiveness. The ultimate ownership of corporates moderates the impacts of media coverage on corporate tax aggressiveness and firm value. The effects of media coverage on tax aggressiveness and firm value are both stronger for non–state-owned enterprises (non-SOEs) than for state-owned enterprises (SOEs). Both studies indicate that the ownership of corporates has moderating effects on the relationship between online media news and corporate governance.

The main contributions of this dissertation are as follows. 1) The research proposes that the MCI represents a comprehensive quantitative measure of media coverage in a particular field. The MCI can help researchers further explore the features of online media and their various effects. 2) The research validates the performance of the MCI. Compared with existing measurements of media coverage, the MCI performed best. 3) Following a design science approach, this dissertation provides a better understanding of applying design science methods and econometrics to online media research. 4) This dissertation paves the way for investigating the reactions of firms to online media using the MCI in two quantitative studies. Both studies find significant impacts of media coverage on corporate governance. Investors, regulators, and managers will be able to evaluate the status of the developments of various firms by utilizing the MCI as a convenient measure of media exposure.