Freedom of the press and corporate misconduct

Nguyen, T. (2021) Freedom of the press and corporate misconduct. Journal of Business Finance and Accounting, 48(9-10), pp. 1668-1710. (doi: 10.1111/jbfa.12532)

Abstract

This study examines how freedom of the press affects corporate misconduct, focusing mainly on earnings management. I find that firms engage more in earnings management when they have a high percentage of sales in countries with restricted media freedom. I find that the influence of foreign partners’ media freedom on earnings management depends on how domestic investors process information about firm export markets and on how multinational firms shape their relationship with stakeholders. Additionally, the presence of analysts in foreign countries reduces firms’ incentives to exploit media restriction to manipulate earnings. Finally, I further show that insiders of these firms tend to be involved in opportunistic insider trading, which could indicate corporate misconduct. Overall, these results show that corporate misconduct can be in part explained by a spill‐over effect of the media freedom of export markets.

• Item Type: Articles
• Additional Information: I acknowledge research funds provided by the General Research Funds program, Department of Accounting and Finance, University of Bristol.
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Nguyen, Dr Trang
• Authors: Nguyen, T.
• College/School: College of Social Sciences > Adam Smith Business School > Accounting and Finance
• Journal Name: Journal of Business Finance and Accounting
• Publisher: Wiley
• ISSN: 0306-686X
• ISSN (Online): 1468-5957
• Published Online: 05 May 2021
• Copyright Holders: Copyright © 2021 The Authors
• First Published: First published in Journal of Business Finance and Accounting 48(9-10): 1668-1710
• Publisher Policy: Reproduced under a Creative Commons License