Media Scrutiny, Monitoring and Corporate Financialisation: How Media Shapes Corporate Financialisation in China

ABSTRACT Does media coverage encourage or restrain corporate financialisation in emerging markets? Focusing on China, and contrary to common assumptions, this study demonstrates that media coverage significantly inhibits corporate financialisation, particularly amid policies prioritising the ‘real economy’. This core finding withstands extensive robustness checks. Using a quantitative content analysis of media coverage of Chinese non‐financial companies and regression analysis using data from 2008 to 2022, we propose and find evidence for two underlying mechanisms: media coverage enhances external monitoring and operational efficiency within firms. The inhibitory impact is amplified for state‐owned enterprises (SOEs), companies located in the eastern region, and firms operating under high competitive pressure. Notably, this impact is primarily driven by positive media coverage, which emerges as the key factor behind the suppression of corporate financialisation. This research provides novel empirical evidence on the disciplinary role of media in curbing corporate financialisation within a major emerging market, contributing significantly to the literature on corporate finance and media economics.