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Media coverage of startups and venture capital investments

Author

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  • Zhou, Xiangyi
  • Zheng, Fang
  • Xiao, Sheng

Abstract

Using a large sample of over 5000 startups across various industries and 524 media outlets in China between 2000 and 2016, we examine the effects of media coverage of startups on Venture Capital (VC) investment decisions and performance. To the best of our knowledge, for the first time in finance literature, we have discovered that media coverage of startups significantly affects VC investment decisions and exit performance. Specifically, such coverage, especially positive coverage, significantly increases the probability and amount of VC investments in startups. It also significantly improves the exit performance of VC investments. The significant effects of media coverage of startups on VC investments are caused by market-oriented instead of state-controlled media. We further find that VC investments in a focal startup are significantly influenced by the average media coverage of other startups in the same industry or the same city. Our results are robust to a battery of robustness tests.

Suggested Citation

  • Zhou, Xiangyi & Zheng, Fang & Xiao, Sheng, 2025. "Media coverage of startups and venture capital investments," Emerging Markets Review, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:ememar:v:68:y:2025:i:c:s1566014125000755
    DOI: 10.1016/j.ememar.2025.101326
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    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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