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Market-Based Solutions to Vital Economic Issues
Research
Dec 8, 2020

Media Slants and Entrepreneurship

Abstract

The ways in which media news is slanted can shape beliefs about the economy, thereby affecting the decision to start a new business. Using exogenous variation in the introduction of Fox News Channel across US counties, I find that increased exposure to a pro-Republican slant during a Republican administration is positively associated with new firm creation. This effect is more pronounced among less-educated entrepreneurs, who rely relatively more on the media to form their economic expectations. I further find that the newly created firms are of lower quality, as evidenced by lower survival rates, more job losses, and higher small business loan default rates.

Note: Research papers posted on SSRN, including any findings, may differ from the final version chosen for publication in academic journals. 


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