Advertising Spending and Media Bias:Evidence from News Coverage of Car Safety Recalls

Beattie, Graham and Durante, Ruben and Knight, Brian and Sen, Ananya (2021) Advertising Spending and Media Bias:Evidence from News Coverage of Car Safety Recalls. Management Science, 67 (2). pp. 698-719. ISSN 0025-1909

Full text not available from this repository.

Abstract

Do mass media bias content in favor of advertisers? If so, what market conditions limit or exacerbate this bias? We examine the relationship between advertising by auto manufacturers in U.S. newspapers and news coverage of car safety recalls between 2000 and 2014. This context allows us to separate the influence of advertisers, who prefer less coverage, from that of readers, who prefer more information about the safety risks associated with the recalls. Consistent with theoretical predictions, we find that newspapers provide less coverage of recalls issued by manufacturers that advertised more regularly on their pages over the previous two years. The effect is especially pronounced for more severe recalls, which are more likely to hurt manufacturers’ reputations. Competition for readers from other newspapers mitigates proadvertiser bias, and competition for advertising by online platforms exacerbates it. We also present suggestive evidence that less news coverage of recalls is associated with more fatal car accidents. This paper was accepted by Joshua Gans, business strategy.

Item Type:
Journal Article
Journal or Publication Title:
Management Science
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/asjc/1800/1803
Subjects:
ID Code:
173448
Deposited By:
Deposited On:
26 Jul 2022 15:45
Refereed?:
Yes
Published?:
Published
Last Modified:
26 Jul 2022 15:45