New Evidence on the Role of the Media in Corporate Social Responsibility

53 Pages Posted: 8 Jan 2016 Last revised: 17 Jan 2018

See all articles by Sadok El Ghoul

Sadok El Ghoul

University of Alberta - Campus Saint-Jean

Omrane Guedhami

University of South Carolina - Moore School of Business

Robert C. Nash

Wake Forest University

Ajay Patel

Wake Forest University, School of Business

Date Written: June 7, 2016

Abstract

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 4,396 unique firms from 42 countries over the period 2003 to 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.

Keywords: Corporate Social Responsibility; Media Freedom; Corporate Governance; Corporate Reputation

JEL Classification: G34; M14

Suggested Citation

El Ghoul, Sadok and Guedhami, Omrane and Nash, Robert C. and Patel, Ajay, New Evidence on the Role of the Media in Corporate Social Responsibility (June 7, 2016). Journal of Business Ethics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2712239 or http://dx.doi.org/10.2139/ssrn.2712239

Sadok El Ghoul (Contact Author)

University of Alberta - Campus Saint-Jean ( email )

Edmonton, Alberta T6G 2R3
Canada
780-465-8725 (Phone)
780-465-8760 (Fax)

Omrane Guedhami

University of South Carolina - Moore School of Business ( email )

Columbia, SC
United States

Robert C. Nash

Wake Forest University ( email )

2601 Wake Forest Road
Winston-Salem, NC 27109
United States

Ajay Patel

Wake Forest University, School of Business ( email )

1834 Wake Forest Road
Building 60, Farrell Hall
Winston-Salem, NC 27106
United States
336-758-5575 (Phone)
336-758-4514 (Fax)

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