Study: Partisan Media Affects What Companies Disclose

By:
Chris Gaetano
Published Date:
Oct 31, 2017
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A recent study has found that Democratic-leaning firms are less likely to report large reductions of employees and property, plants and equipment if they're in a Fox News coverage area than if they were not, according to the Harvard Business Review. The researchers defined Democratic-leaning firms as those which had made large soft-money contributions to Democratic Party candidates in the past. 

What was found was that those firms whose headquarters were in the same areas Fox News broadcast were about 20 percent less likely to report large reductions in employees, property, plants and equipment than similar firms in non-Fox News areas, as well as politically unconnected firms. A "large reduction" in this case was defined as an at least 10 percent loss in the number of workers and an at least five percent loss in property, plant and equipment. From this the researchers concluded that partisan media outlets can heavily influence how individuals within organizations make decisions. 

"We find that firms subject to the threat of slanted coverage suppress the release of negative information before the event and release it subsequently. Our results are consistent with theory on the active role firms can play in managing their reputational capital through anticipatory actions to avoid negative media coverage," said the study abstract. 

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