Research on the impact of media coverage has long attracted attention of scholars in management. However, extant research only focused on the impact of commercialized media but overlooked the importance of state media, which plays critical roles in the emerging economics. In this study, I argue that negative sentiment of state media coverage prompts firm’s strategic change whereas positive sentiment of state media coverage reduces firm’s strategic change. The impact of negative sentiment is strengthened by the degree of state ownership whereas the impact of positive sentiment is strengthened by the political attention to the whole industry that the focal firm operates within. In the context of China, I find empirical support for my hypotheses. This study makes contributions to the media research in management field and unpacks the mechanisms that how state media influences firm’s actions.

Keywords: media, strategic change, state ownership, emerging economics.