New Evidence on the Role of the Media in Corporate Social Responsibility
- 970 Downloads
Prior research suggests that the media plays an important information intermediary role in capital markets. We investigate the role of the media in influencing firms’ engagement in corporate social responsibility (CSR) activities. Using a large sample of 4396 unique firms from 42 countries over the period 2003–2012, we find strong evidence that firms engage in more CSR activities if located in countries where the media has more freedom. This relation is robust to using various proxies for media freedom, an alternative source of CSR data, and to applying the instrumental variables approach to address endogeneity. In additional analyses, we find that the positive relation between media freedom and CSR engagement is stronger for better governed firms and for larger firms. Since the media have the ability to impact reputational capital, we conclude that media freedom affects firms’ incentives to engage in costly CSR activities.
KeywordsCorporate social responsibility Media freedom Corporate governance Corporate reputation
JEL ClassificationG34 M14
The authors thank an anonymous reviewer, Najah Attig, Narjess Boubakri, Ruiyuan Chen, Jun-Koo Kang, Greg Shailer (Editor), Helen Wang, Ying Zheng, and participants at the 2016 FMA Asia/Pacific Conference and the 2016 Conference on the Impact of Corporate Social Responsibility for constructive comments. We appreciate generous financial support from Canada’s Social Sciences and Humanities Research Council and the School of Business at Wake Forest University and excellent research assistance from Ruiyuan Chen.
- Arora, S., & Gangopadhyay, S. (1995). Toward a theoretical model of voluntary overcompliance. Journal of Economic Behavior and Organization, 28, 289–309.Google Scholar
- Attig, N., Boubakri, N., El Ghoul, S., & Guedhami, O. (2015). Firm internationalization and corporate social responsibility. Journal of Business Ethics (forthcoming).Google Scholar
- Bansal, P., & Clelland, I. (2004). Talking trash: Legitimacy, impression management and unsystematic risk in the context of the natural environment. Academy of Management Journal, 47, 93–103.Google Scholar
- Bansal, P., & Roth, K. (2000). Why companies go green: A model of ecological responsiveness. Academy of Management Journal, 43, 717–736.Google Scholar
- Bartkus, B., Morris, S., & Siefert, B. (2002). Governance and corporate philanthropy: Restraining Robin Hood? Business and Society, 41, 319–345.Google Scholar
- Borden, M. J. (2007). The role of financial journalists in corporate governance. Fordham Journal of Corporate and Financial Law, 12, 311–369.Google Scholar
- Burgess, J. (2010). Evaluating the evaluators: Media freedom indexes and what they measure. Working paper, Center for Global Communication Studies, University of Pennsylvania.Google Scholar
- Carroll, A., & Buchholtz, A. (2011). Business and society: Ethics, sustainability, and stakeholder management, 8th ed. Mason: South-Western/Cengage Learning.Google Scholar
- Cline, B. N., Walkling, R. A., & Yore, A. S. (2016). The agency costs of managerial indiscretions: Sex, lies, and firm value. Journal of Financial Economics (forthcoming).Google Scholar
- Dyck, A., & Zingales, L. (2002). The corporate governance role of the media. In R. Islam (Ed.), The right to tell: The role of the media in development. Washington, DC: World Bank.Google Scholar
- El Ghoul, S., Guedhami, O, & Kim, Y. (2016). Country-level institutions, firm value, and the role of corporate social responsibility initiatives. Journal of International Business Studies (forthcoming).Google Scholar
- EPG. (2015). Business backs education report. http://www.unesco.org/education/BBE-EPG-Report2015.pdf.
- Freeman, R. E. (1984). Strategic management: A stakeholder approach. Boston: Pitman.Google Scholar
- Goss, A. (2009). Corporate social responsibility and financial distress. In Proceedings of the administrative sciences association of Canada annual meetings, 30.Google Scholar
- Guedhami, O. (2012). Characteristics of government acquisitions over time: International evidence and crisis effect. Privatization Barometer Report (pp. 30–43).Google Scholar
- Hathaway, O. (2005). Between power and principle: An integrated theory of international law. University of Chicago Law Review, 72, 469–536.Google Scholar
- Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations. Thousand Oaks, CA: Sage.Google Scholar
- Jensen, M. (1979). Toward a theory of the press. Working paper, Harvard University.Google Scholar
- Keck, M., & Sikkink, K. (1998). Activists beyond borders: Advocacy networks in international politics. Ithaca, NY: Cornell University Press.Google Scholar
- KPMG. (2013). The KPMG survey of corporate responsibility reporting 2013. https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/corporate-responsibility/Documents/corporate-responsibility-reporting-survey-2013-exec-summary.pdf.
- Maistriau, A., & Bonardi, J. (2014). How much does negative public exposure on environmental issues increase environmental performance? In Academy of management proceedings supplement, p. 11328.Google Scholar
- McKay, J., Hill, B., & Buckler, J. (2005). A history of western society since 1300 (advanced placement edition). Boston: Houghton Mifflin.Google Scholar
- McKinsey & Company. (2009). Valuing corporate social responsibility: McKinsey Global Survey Results. http://www.mckinsey.com/insights/corporate_finance/valuing_corporate_social_responsibility_mckinsey_global_survey_results.
- Price, M. (2011). Press freedom measures: An introduction. In M. Price, S. Abbott, & L. Morgan (Eds.), Measures of press freedom and media contributions to development: Evaluating the evaluators. New York: Peter Lang.Google Scholar
- Roberts, M., & Whited, T. (2013). Endogeneity in empirical corporate finance. In G. M. Constantinides, M. Harris, & R. M. Stulz (Eds.), Handbook of the economics of finance. Oxford, UK: Elsevier.Google Scholar
- Sobel, R., Dutta, N., & Roy, S. (2011). Beyond borders: Is media freedom contagious? In M. Price, S. Abbott, & L. Morgan (Eds.), Measures of press freedom and media contributions to development: Evaluating the evaluators. New York: Peter Lang.Google Scholar
- Stahl, G., & Sully de Luque, M. (2014). Antecedents of responsible leader behavior: A research synthesis, conceptual framework, and agenda for future research. Academy of Management Journal, 28, 235–254.Google Scholar
- Stephens, M. (1994). History of newspapers. Collier’s Encyclopedia.Google Scholar
- Vogel, D. (2006). The market for virtue: The potential and limits of corporate social responsibility. Washington, DC: Brookings Institution Press.Google Scholar