We examine the effect of media coverage on firm-level investment efficiency. We find that media coverage reduces under-investment but increases over-investment. The negative effect of media coverage on under-investment is more pronounced in firms affected by greater information asymmetry and poorer corporate governance. The positive effect of media coverage on over-investment is driven by media-induced CEO overconfidence. Additional results show that both investment- and non-investment-related news coverage decrease under-investment, while non-investment-related news coverage is more influential in increasing over-investment. In general, higher news optimism is associated with less under-investment but more over-investment. Moreover, media coverage affects investment efficiency through its information dissemination rather than information creation function. Collectively, our results suggest that firms’ media visibility promotes more over-investment than under-investment.

我们研究了媒体报道对公司层面投资效率的影响。我们发现媒体报道减少了投资不足，但增加了过度投资。媒体报道对投资不足的负面影响在受更大信息不对称和更差公司治理影响的公司中更为明显。媒体报道对过度投资的积极影响是由媒体引起的 CEO 过度自信驱动的。额外的结果表明，与投资和非投资相关的新闻报道都减少了投资不足，而非投资相关的新闻报道对增加过度投资的影响更大。一般来说，较高的新闻乐观度与较少的投资不足但更多的过度投资相关。而且，媒体报道通过其信息传播而非信息创造功能影响投资效率。总的来说，我们的结果表明，公司的媒体知名度比投资不足更能促进过度投资。