Local Corporate Social Responsibility, Media Coverage, and Shareholder Value

63 Pages Posted: 27 Sep 2012 Last revised: 16 Sep 2017

See all articles by Seong K. Byun

Seong K. Byun

Virginia Commonwealth University (VCU) - Department of Finance, Insurance & Real Estate

Jong-Min Oh

University of Central Florida (UCF) - Department of Finance

Date Written: July 2017

Abstract

Using news articles covering firm’s corporate social responsibility (CSR) activities, we find that publicized CSR activities are positively associated with shareholder value and improved future operating performance. Furthermore, we find that media coverage on CSR engagements with local impact on companies’ communities and employees, rather than those with broader social impact on the general public, is the main driver in explaining higher shareholder value and operating performance. We also implement a two-stage least-squares regression (2SLS) and propensity score matching to establish a causal link between publicized local CSR activities and shareholder value. Our evidence is consistent with the notion that shareholders put positive value on locally-oriented CSR when it is also complemented with high level of stakeholder awareness.

Keywords: Corporate Social Responsibility, Media Coverage, Stakeholder Theory, and Intangibles

JEL Classification: G14, G32, M14, L82

Suggested Citation

Byun, Seong K. and Oh, Jong-Min, Local Corporate Social Responsibility, Media Coverage, and Shareholder Value (July 2017). Journal of Banking and Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2153248 or http://dx.doi.org/10.2139/ssrn.2153248

Seong K. Byun (Contact Author)

Virginia Commonwealth University (VCU) - Department of Finance, Insurance & Real Estate ( email )

Richmond, VA 23284
United States

Jong-Min Oh

University of Central Florida (UCF) - Department of Finance ( email )

College of Business Administration
P.O. Box 161400
Orlando, FL 32816
United States

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