(iPoster) Technological Advance, Intellectual Property Rights and Media Bias

• In Event: Poster Session: Information Technology and Politics & Science, Technology, and Environment
  In Poster Session: Poster Session: Information Technology and Politics

Abstract

The advance of information technologies has not fortify democracy as once anticipated, but instead witnesses increased political polarization, a revival of nationalism, and a resurgence of strongman rule. These changes in the political landscape can be partially attributed to the influence of new technologies on the media sector, which reshaped public attitudes, as evidenced in China where the political centralization that began after 2013 coincided with a notable shift in the media landscape toward a pro-government bias during the same period. However, given this context, an intriguing question arises: what underlying mechanisms or dynamics of technological advancements contribute to the media's increasing alignment with pro-government narratives?
While censorship is a notable way technology affects the media, this paper focuses on a different challenge: the poorly enforced intellectual property rights amid newspapers' shift to digital. During this digital shift, platforms like Toutiao, one of China's largest mobile news aggregation platforms which sharing ownership with TikTok, blatantly scrape online newspaper content to attract traffic. The Chinese government's lenient stance on copyright infringements, coupled with minimal penalties, essentially endorses this practice. As mobile platforms like Toutiao become the primary news source, newspapers find themselves cornered into selling their content at minimal prices, forfeiting their ability to monetize online content. This forces reliance on local government subsidies, significantly biasing their reporting in favor of the government.
Utilizing the regional variances in China's 3G coverage, this study explores the impact of 3G technology on local newspapers’ political leanings. Adopting the methodology from Qin et al. (2018), we develop an index to measure newspapers' political bias by categorizing content into themes such as government-endorsed reporting, sensitive or negative coverage, and commercial content. The analysis focuses on prefecture and county-level newspapers, which are more market-oriented and therefore more vulnerable to the financial pressures brought by shrinking readership and advertising revenues due to mobile internet adoption. The results show that 3G coverage significantly increased the political bias of these newspapers, pushing them to align more closely with government narratives. Also, dynamic event studies highlight that the impact of 3G unfolded gradually as newspapers adjust their strategies to the new technological landscape.
To address potential endogeneity concerns, we employ lightning strike frequency as an instrumental variable to capture exogenous variations in the speed of 3G network expansion. Lightning strikes affect the cost of maintaining mobile network infrastructure, leading to slower 3G rollout in high-frequency regions. The results confirm that 3G expansion causally increased media bias, with IV estimates showing a stronger effect compared to OLS, consistent with heterogeneous impacts on regions more constrained by lightning frequency.
We conduct extensive robustness checks, including alternative measures of media bias, placebo tests using 2G networks and broadband internet, to ensure the validity of the results. The findings remain consistent across alternative measures of media bias and adjustments for population density, supporting the robustness of the analysis. Placebo tests with 2G networks and broadband internet coverage further confirms that the observed effects are unique to 3G’s capabilities in facilitating mobile internet access.
Finally, mechanism analysis reveals that declining advertising revenues drive newspapers to increase reliance on government subsidies, thereby aligning content more closely with state propaganda. Furthermore, we identify significant heterogeneity in the effects of 3G expansion across different regions, reflecting variations in local market conditions and government control. Through these methodological advancements, this study contributes to the broader understanding of how digital innovation interacts with media economics and political control in contexts characterized by centralized economies.

Authors

• Lingtian Bu, School of Finance, Renmin University of China

• Meng Miao, Renmin University of China