Cross-Country Variation in the Effectiveness of the Media’s Corporate Governance Role: Decision to Abandon Value-Destroying Acquisition Attempts

I examine the cross-country variation in the effectiveness of the media’s corporate governance role. I find this role to be more effective in countries with greater societal trust or concern for shareholder wealth maximization. In those countries, news coverage of value-destroying acquisition attempts leads to a higher likelihood of acquisition abandonment. By contrast, the effectiveness of the media’s governance role does not vary directly with the status of local media freedom. The results imply that a society’s shared values, such as trust or concern for shareholder wealth maximization, play an important role in the media’s watchdog function.