Ted Matherly and Brad N. Greenwood, in preparation for submission, Management Information Systems Quarterly.

The rise of the internet has precipitated the birth and downfall of numerous industries, ranging from hoteling, to globalization and outsourcing, to the retail sales of gaming and books. Yet, perhaps no industry has been transformed to the same degree as news production. Journalism has seen the rise of content aggregation, the proliferation of fake news through social media, and the decimation of local reporting capacity through the hollowing of the newspaper industry. In this work, we examine the downstream effects of the decline of the newspaper industry on an outcome of significant theoretical and practical significance: political corruption. As newspapers are an important investigative arm of local communities, it is possible that the decline of community media will embolden corrupt actors who believe they are less likely to be detected following the closure of a local newspaper. To examine this relationship, we leverage a novel dataset of federal corruption charges and newspaper closures using a difference in difference approach. Results indicate a significant rise in federal corruption charges when major newspapers close in a federal district. Strikingly, we observe no evidence that the rise in online newsvendors and the democratization of the press does little to ameliorate this effect. This highlights the important role of the “fourth estate” in inhibiting corruption in governance.

Cover photo by rick valentin, licensed Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0).

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