Public relations expenditure, media tone, and regulatory decisions

This paper examines whether and how firms influence regulatory decisions through media capture. Using the unique Chinese regulation setting, we find that higher public relations expenditure reduces a negative pre-IPO tone this relationship is weaker when both outlets face legal punishment risks. By linking incentives for capture to decisions, further less associated with likelihood of IPO approval. In sum, our findings document can and, thus, obtain preferred approvals from regulators, which in turn resource allocation efficiency an emerging market.