 Media exposure on corporate social irresponsibility and firm performanceChia-Chen Teng and J. Jimmy Yang Pacific-Basin Finance Journal, 2021, vol. 68, issue C Abstract: This study investigates the impact of media exposure of corporate social irresponsibility (CSI) events on firm performances. Using unique data from an emerging market, we find that CSI events trigger significant and negative cumulative abnormal returns (CARs). Negative CARs are more profound for environment and safety issues as well as illegal violations. The existence of CSI events has negative impact on the subject firm's long-term operating and financial performances due to reputation damage and extra costs for regulatory compliance and rebuilding reputation. Furthermore, the number of CSI reports is negatively associated with firm performance and positively correlated with stock price crash risk. The negative effect is more profound for CSI events reported by the media than those self-reported by subject firms due to regulations. Our findings support the conjecture that media can serve as an external corporate governance mechanism, especially in emerging markets where well established governance structure is not yet available. Keywords: Corporate social irresponsibility; Media exposure; Cumulative abnormal returns; External governance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:68:y:2021:i:c:s0927538x21001116 DOI: 10.1016/j.pacfin.2021.101604 Access Statistics for this article Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee More articles in Pacific-Basin Finance Journal from Elsevier |
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