The new invisible hand: How common owners use the media as a strategic tool
By: Mark Des, Jardine, R. Shi, Wei and Cheng, Xin
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Material type: 
BookPublisher: Administrative Science Quarterly Description: 68(4), Dec, 2023: p.956-1007.Subject(s): Media–Rival Common Ownership, Competitive Dynamics Strategic Competition Common Ownership Media Company Non-Media Focal Firm Institutional Investors Media Coverage Competitiveness Portfolio Firms Strategic Consequences Incentives Power to Influence Media Executives Novel Dataset Rival Firms Competitive Markets Media as a Strategic Tool
In:
Administrative Science QuarterlySummary: While research has uncovered an array of visible competitive dynamics, a strategic world of competition lies beneath the surface that should also be theorized and empirically traced. We investigate the strategic consequences of “media–rival” common ownership, in which investors own a media company and a non-media focal firm’s rivals. We posit that focal firms receive worse coverage from media outlets when institutional investors hold substantial ownership in both a media company and the focal firm’s rivals because the investors’ common holdings provide them with incentives and power to enhance the competitiveness of their portfolio firms by tainting the focal firm’s media coverage. We account for three moderators to show that this effect amplifies when investors have stronger incentives and power to influence the media and when media executives have incentives to cater to the interests of their investors. Using a novel dataset on common ownership of rival firms and media companies, we find support for our theory. Our study reveals a new invisible hand underlying competitive markets and offers a new view of the media as a strategic tool. – Reproduced
https://journals.sagepub.com/doi/full/10.1177/00018392231192863
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
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Articles
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Indian Institute of Public Administration | 68(4), Dec, 2023: p.956-1007 | Available | AR131386 |
While research has uncovered an array of visible competitive dynamics, a strategic world of competition lies beneath the surface that should also be theorized and empirically traced. We investigate the strategic consequences of “media–rival” common ownership, in which investors own a media company and a non-media focal firm’s rivals. We posit that focal firms receive worse coverage from media outlets when institutional investors hold substantial ownership in both a media company and the focal firm’s rivals because the investors’ common holdings provide them with incentives and power to enhance the competitiveness of their portfolio firms by tainting the focal firm’s media coverage. We account for three moderators to show that this effect amplifies when investors have stronger incentives and power to influence the media and when media executives have incentives to cater to the interests of their investors. Using a novel dataset on common ownership of rival firms and media companies, we find support for our theory. Our study reveals a new invisible hand underlying competitive markets and offers a new view of the media as a strategic tool. – Reproduced
https://journals.sagepub.com/doi/full/10.1177/00018392231192863
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