Media Coverage of Environmental Pollution and the Investment of Polluting Companies

Chang, Y., He, Y., Jin, X., Li, T., & Shih, C. M. (2020). Media coverage of environmental pollution and the investment of polluting companies*. Asia‐Pacific Journal of Financial Studies, 49(5).

37 Pages Posted: 30 Aug 2021

See all articles by Ying Chang

Ying Chang

Jilin University (JLU)

Yu He

Central University of Finance and Economics (CUFE) - School of Economics

Xingye Jin

Central University of Finance and Economics(CUFE)

Tao Li

Central University of Finance and Economics (CUFE) - School of Economics

Carmen Shih

Nanyang Business School, Nanyang Technological University

Date Written: October 19, 2020

Abstract

This study examines the effect of local media coverage of environmental pollution on corporate investment based on a textual analysis of China’s provincial newspapers. Using a sample of publicly listed firms in polluting industries, we document a significantly positive effect of media coverage on both the total investment and green investment of these firms. Further analyses reveal that the positive effect of pollution-related media coverage on investment is more pronounced when firms have weak governance mechanisms. Overall, our findings imply that media not only plays an important monitoring role but also enhances corporate social responsibility.

Keywords: Media coverage, Investment, Environmental pollution, Corporate governance, Textual analysis

JEL Classification: G31, G38, M14

Suggested Citation

Chang, Ying and He, Yu and Jin, Xingye and Li, Tao and Shih, Chia Mei, Media Coverage of Environmental Pollution and the Investment of Polluting Companies (October 19, 2020). Chang, Y., He, Y., Jin, X., Li, T., & Shih, C. M. (2020). Media coverage of environmental pollution and the investment of polluting companies*. Asia‐Pacific Journal of Financial Studies, 49(5)., Available at SSRN: https://ssrn.com/abstract=3765407

Ying Chang

Jilin University (JLU)

Guilin Road
Chaoyang, Changchun 130021
China

Yu He (Contact Author)

Central University of Finance and Economics (CUFE) - School of Economics ( email )

Beijing
China

Xingye Jin

Central University of Finance and Economics(CUFE)

Beijing
China

Tao Li

Central University of Finance and Economics (CUFE) - School of Economics ( email )

Beijing
China

Chia Mei Shih

Nanyang Business School, Nanyang Technological University ( email )

Singapore, 639798
Singapore

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