An Empirical Analysis of Media Coverage and Corporate Debt Maturity Structure of Chinese Listed Companies

Abstract

Media plays an important role in corporate debt financing decisions. However, no literature investigations the impact of media attention affect debt maturity structure. Based on the theories of asymmetric information and reputation, we use 5988 sample data of firms listed in Shenzhen and Shanghai stock exchanges in the period 2010-2014 and apply Heckman two-stage model to empirically test the impact mechanism of media coverage on debt maturity structure of listed companies. We explore the impact of media coverage on the debt maturity structure under different ownership nature. The results show that, favorable media coverage and debt maturity structure of listed companies are positive related. Favorable media coverage can increase the level of debt maturity structure of a listed company. Furthermore, unfavorable media coverage is negatively related to f debt maturity structure. Unfavorable media coverage can decrease the level of corporate debt maturity structure. Media coverage has a different impact on debt maturity structure with different nature of ownership. Specifically, with respect to state-owned enterprises, the impact of favorable media coverage on increasing debt maturity structure is more apparent on non-state-owned enterprises, and the impact of unfavorable media coverage on decreasing debt maturity structure is more apparent on state-owned enterprises.

Keywords: Debt Maturity Structure, Media Coverage, Ownership Nature, Heckman Two-stage Model