TY  - JOUR
AU  - Dyck,Alexander
AU  - Volchkova,Natalya
AU  - Zingales,Luigi
TI  - The Corporate Governance Role of the Media: Evidence from Russia
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12525
PY  - 2006
Y2  - September 2006
UR  - http://www.nber.org/papers/w12525
L1  - http://www.nber.org/papers/w12525.pdf
N1  - Author contact info:
Alexander Dyck
Joseph L. Rotman School of Management
University of Toronto
105 St. George Street
Toronto, Ontario
Canada M5S 3E6
Tel: 416/946-0819
Fax: 416/978-5433
E-Mail: adyck@rotman.utoronto.ca

Natalya Volchkova
Nakhimovsky pr., 47, office 720
117418 Russia, Moscow
E-Mail: nvolchkova@cefir.ru

Luigi Zingales
Booth School of Business
The University of Chicago
5807 S. Woodlawn Avenue
Chicago, IL 60637
Tel: 773/702-3196
Fax: 773/834-2081
E-Mail: luigi.zingales@ChicagoBooth.edu
AB  - We study the effect of media coverage on corporate governance by focusing on Russia in the period 1999-2002. This setting offers us three ideal conditions for such a study: plenty of corporate governance violations, no alternative mechanisms to address them, and the presence of an investment fund (the Hermitage) that actively lobbies the international press to shame companies perpetrating those violations. We find that Hermitage’s lobbying is effective in increasing the coverage of corporate governance violations in the Anglo-American press. We also find that coverage in the Anglo-American press increases the probability that a corporate governance violation is reversed. This effect is present even when we instrument coverage with an exogenous determinant, i.e. the Hermitage’s portfolio composition at the beginning of the period. The Hermitage’s strategy seems to work in part by impacting Russian companies’ reputation abroad and in part by forcing regulators into action.
ER  -