Ted Matherly and Brad N. Greenwood, under review at Management Information Systems Quarterly. (SSRN)

The rise of the internet has precipitated the birth and downfall of numerous industries, but 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, all of which have served to hollow the newspaper industry. In this work, we examine the downstream effects of this decline 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 closure of community media will embolden corrupt actors who believe they are less likely to be detected following the closure of a local newspaper. To estimate any effect, we employ a difference in difference approach, exploiting the phased closure of major daily newspapers across the country. Results indicate a significant increase in federal corruption charges in federal districts following closure. Further, we observe no evidence that the rise in online newsvendors and the democratization of the press ameliorates this effect. This highlights the important role of the “fourth estate” in inhibiting corruption in governance and the need to conceptualize the punitive societal effects of the internet more expansively.

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

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