Research Summary
Research Summary
The Role of the Media in Corporate Governance and Finance
Description
Dyck studies the role played by media in financial markets: in transmitting information about a company, in shaping the market response to the information they communicate, in exposing mis-governance problems, and in forcing companies to behave in "politically correct" ways. Dyck's cross-country empirical research finds that public opinion pressure helps curbing private benefits of control and also induces corporate managers to bow to environmental pressures, which are not necessarily in shareholders' interest. Other work explores the incentives of the media to expose bad corporate practices and how these incentives may vary over the business cycle. Ongoing work explores empirically how media attention and the structure of media markets affects governance outcomes and market responses to news.