Media coverage and labor investment efficiency: Evidence from China
- Resource Type
- Article
- Authors
- Jin Liu; Tingwei Li; Lei Wang
- Source
- Asia-Pacific Journal of Financial Studies, 52(1), pp.116-152 Feb, 2023
- Subject
- 경영학
- Language
- English
- ISSN
- 2041-6156
2041-9945
Using 2.09 million pieces of media coverage associated with Chinese firms during 2006 to 2019, we find a significantly positive relationship between media coverage and labor investment efficiency. Both newspaper and online media coverage can effectively reduce firms’ labor over-investment and under-investment. Our results are robust after addressing a range of endogeneity concerns. Further analyses show that the positive relationship between media coverage and labor investment efficiency is more pronounced for firms with higher labor cost stickiness or when human capital is more important to the firm’s business model. Mechanism analyses reveal that media coverage improves labor investment efficiency through compensation incentive mechanism, supervision mechanism and information disclosure mechanism.