TY - JOUR
T1 - When the local newspaper leaves town
T2 - The effects of local newspaper closures on corporate misconduct
AU - Heese, Jonas
AU - Pérez-Cavazos, Gerardo
AU - Peter, Caspar David
N1 - JEL classifications: M40, M41, M46
Publisher Copyright:
© 2021
Publisher Copyright:
© 2021
PY - 2021/8/25
Y1 - 2021/8/25
N2 - We examine whether the local press is an effective monitor of corporate misconduct. Specifically, we study the effects of local newspaper closures on violations by local facilities of publicly listed firms. After a local newspaper closure, local facilities increase violations by 1.1% and penalties by 15.2%, indicating that the closures reduce firm monitoring by the press. This effect is not driven by the underlying economic conditions, the underlying local fraud environment, or the underlying firm conditions. Taken together, our findings indicate that local newspapers are an important monitor of firms’ misconduct.
AB - We examine whether the local press is an effective monitor of corporate misconduct. Specifically, we study the effects of local newspaper closures on violations by local facilities of publicly listed firms. After a local newspaper closure, local facilities increase violations by 1.1% and penalties by 15.2%, indicating that the closures reduce firm monitoring by the press. This effect is not driven by the underlying economic conditions, the underlying local fraud environment, or the underlying firm conditions. Taken together, our findings indicate that local newspapers are an important monitor of firms’ misconduct.
UR - http://www.scopus.com/inward/record.url?scp=85114343033&partnerID=8YFLogxK
U2 - 10.1016/j.jfineco.2021.08.015
DO - 10.1016/j.jfineco.2021.08.015
M3 - Article
JO - Journal of Financial Economics
JF - Journal of Financial Economics
SN - 0304-405X
ER -