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Cross‐Country Variation in the Effectiveness of the Media's Corporate Governance Role: Decision to Abandon Value‐Destroying Acquisition Attempts
Author(s) -
Kim Jinhee
Publication year - 2019
Publication title -
asia‐pacific journal of financial studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.375
H-Index - 15
eISSN - 2041-6156
pISSN - 2041-9945
DOI - 10.1111/ajfs.12258
Subject(s) - corporate governance , abandonment (legal) , shareholder , maximization , variation (astronomy) , value (mathematics) , business , shareholder value , function (biology) , media coverage , economics , political science , microeconomics , sociology , finance , law , physics , evolutionary biology , biology , astrophysics , machine learning , computer science , media studies
I examine the cross‐country variation in the effectiveness of the media's corporate governance role. I find this role to be more effective in countries with greater societal trust or concern for shareholder wealth maximization. In those countries, news coverage of value‐destroying acquisition attempts leads to a higher likelihood of acquisition abandonment. By contrast, the effectiveness of the media's governance role does not vary directly with the status of local media freedom. The results imply that a society's shared values, such as trust or concern for shareholder wealth maximization, play an important role in the media's watchdog function.