News sentiment and the cost of debt1

IF 4.8 2区经济学 Q1 BUSINESS, FINANCE

Pacific-Basin Finance Journal Pub Date : 2025-02-26 DOI:10.1016/j.pacfin.2025.102721

Yedong Wang , Junchao Xiao , Lei Wang , Daoping Wang

引用次数: 0

Abstract

Based on 4.4 million news articles from approximately 6000 newspapers, this paper investigates the relationship between news sentiment and the cost of debt. We find that news sentiment is negatively associated with firms' offering yield spreads. The analysis reveals that news sentiment influences the cost of debt at both firm level and market level. Further research finds that since Chengtou firms, state-owned firms and firms in developed provinces have strong government support, the impact of news sentiment will be moderated. Additionally, the impact of news sentiment is attenuated for firms with higher credit rating, lower debt ratio, or higher cash ratio. The findings are robust to controls for standard yield determinants, alternative measures of dependent and independent variables, and potential endogeneity concerns.

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来源期刊

Pacific-Basin Finance Journal BUSINESS, FINANCE-

CiteScore

6.80

自引率

6.50%

发文量

157

期刊介绍： The Pacific-Basin Finance Journal is aimed at providing a specialized forum for the publication of academic research on capital markets of the Asia-Pacific countries. Primary emphasis will be placed on the highest quality empirical and theoretical research in the following areas: • Market Micro-structure; • Investment and Portfolio Management; • Theories of Market Equilibrium; • Valuation of Financial and Real Assets; • Behavior of Asset Prices in Financial Sectors; • Normative Theory of Financial Management; • Capital Markets of Development; • Market Mechanisms.