articleStrategic Management JournalFeb 6, 2017Closed access

How Media Coverage of Corporate Social Irresponsibility Increases Financial Risk

JFJulian F KölbelTBTimo BuschLMLeonhardt M. Jancso

ETH Zurich · Massachusetts Institute of Technology · +1 more institution

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Abstract

Research summary: This article explores the relationship between corporate social irresponsibility ( CSI ) and financial risk. We posit that media coverage of CSI generates risk by providing conditions that increase the potential for stakeholder sanctions. Through analyzing an international panel of 539 firms during 2008–2013, we find that firms receiving higher CSI coverage face higher financial risk. We show that the reach of the reporting media outlet is a critical condition for this relationship. Once the outlet has a high reach, the severity of CSI coverage is a boundary condition that further reinforces the effect. Our findings complement existing theory about the risk‐mitigating effect of corporate…

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624
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Authors

3

Topics & keywords

Topics
Keywords
  • Corporate social responsibility
  • Corporate governance
  • Business
  • Social media
  • Stakeholder
  • Accounting
  • Risk management
  • Sanctions
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