Abstract
We examine whether common business group affiliation affects media reporting on firms and whether firms experience any real effects as a result. We find that firms receive more positive coverage from connected newspapers. This result is robust to a DiD design and controlling for newspaper-firm pair fixed effects, and is stronger when business groups have more incentive and power to influence the newspapers and when firms need more positive media coverage. We further show that these firm-media connections undermine the newspaper’s information intermediary role, thereby obfuscating firms’ information environment and facilitating opportunistic related party transactions by business groups.
