Does Political Connection Tamper with the Corporate Governance Effect of Media Attention

Abstract

Abstract.It is an undisputable fact that political connection influences the internal corporate governance in transitional economies However, on whether and how political connection affects the external stakeholders' governance, in-depth discussion is still needed. Taking private listed companies in China as examples, this paper investigates the effect of political connection on the corporate governance role of media from the perspective of earnings management and finds that earnings management is impacted by media attention through reputation mechanism but not financial penalties, while political connection weakens the governance effect. In light of the findings, market mechanism should be perfected, the independence of media should be guaranteed, and the government's function should be continually transformed to give full play of media governance.

The Moderating Effect of Politically Connected Boards on The Relationship Between Board Characteristics and Earnings Management

“…In addition, the number of politically connected boards in Indonesia is also very limited, which is only 1.8%, so it is not able to significantly influence earnings management. The insignificant relationship of the politically connected boards were also found by several other studies such as research from Lu &Zhang (2016) andFan (2017).…”