Board Members’ Media Connections and Access to Financing

Boards of directors with linkages to media firms have been found to enhance a firm’s news coverage and public relations. We investigate the economic effects of this enhanced communication by studying issuance of equity and debt securities. Media-linked board members are associated with more outside public equity and debt financing. For equity, the main effect is on the quantity of funds raised (i.e., an effect at the intensive margin). For debt, the main effect is on the ability and decision to issue bonds (i.e., an effect at the extensive margin). The size of the effects we uncover are economically large, with a statistical association up to an extra 15% of additional capital raised as a proportion of asset value.