firms and find that postings positively predict management turnover. Collectively, these
results are consistent with the theory that media play an important monitoring role.
18.5.2 Media and the Cost of Capital
If media coverage influences the price at which firms raise or acquire capital, managers
have incentives to take actions that affect coverage. Actions that could improve media
coverage include issuing more press releases, hiring an IR firm, or increasing advertising
expenditures.
Bushee and Miller (2012) document that hiring an IR firm increases media
coverage, analyst following, and institutional investor holdings.
Gurun and Butler (2012)
find that firms’ advertising expenditures in local media outlets positively predict the lin-
guistic tone ...