Firm-level media coverage, bank loans, and the role of institutional environments

Jia, Z., Li, D., Shi, Y. and Xing, L. (2023) Firm-level media coverage, bank loans, and the role of institutional environments. Journal of Corporate Finance, 83, 102491. (doi: 10.1016/j.jcorpfin.2023.102491)

Abstract

Employing an international sample of bank loans from 37 countries, we find that both borrowers' intensive media coverage and positive media sentiment reduce the interest rate spreads on bank loans. In syndicated lending, positive media sentiment increases the likelihood of a non-relationship bank leading or participating in a loan syndicate and decreases the loan share of the lead arranger. Furthermore, we demonstrate that the negative impact of media news on loan spreads is more pronounced in countries with better financial information and governance environments, a higher representation of privately owned media, and lower government control of banks. These findings underscore the significance of media coverage and sentiment in shaping the costs of bank loans worldwide.

• Item Type: Articles
• Keywords: Loan pricing, media coverage, media sentiment, institutional environment.
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Shi, Dr Yukun and Jia, Mr Zhehao and Xing, Dr Lu
• Authors: Jia, Z., Li, D., Shi, Y., and Xing, L.
• College/School: College of Social Sciences > Adam Smith Business School > Accounting and Finance
• Journal Name: Journal of Corporate Finance
• Publisher: Elsevier
• ISSN: 0929-1199
• ISSN (Online): 1872-6313
• Copyright Holders: Copyright: © 2023 The Author(s)
• First Published: First published in Journal of Corporate Finance 83: 102491
• Publisher Policy: Reproduced under a Creative Commons licence

Related URLs

• Social Science Research Network (SSRN)