Media reputation in initial public offerings: A study of financial news coverage in Hong Kong

This study investigated media reputation in initial public offerings (IPOs) by proposing eight attributes of substantive media reputation from environmental and product-resource perspectives. A content analysis on financial news coverage (2281 newspaper articles from 2004 to 2010) in Hong Kong was conducted to examine how print media reported financial and nonfinancial information on 38 IPO firms in the sectors of financial, properties and construction, and consumer goods. Results from partial least squares analysis showed that, although substantive media reputation and recency of news coverage together only explained a small proportion of changes in IPO share price, substantive media reputation has a significant positive effect on changes in IPO share price. Apart from the significant positive effect from the presentation tone of environmental attributes, the tone of social attributes had a significant negative effect on substantive media reputation. With the increasing concern on measuring media reputation attributes in financial news coverage across different contexts, this study contributes to the applicability of environmental and product-resource attributes in the specific context of IPOs.