Corporate Social Irresponsibility and Firm Value: International Evidence from Media Coverage

Abstract

Media attention to corporate social irresponsibility (CSiR) is increasing around the world. Using a sample of firms from 43 countries, we find that media coverage of CSiR is negatively associated with firm value. We further find that the negative relation between media coverage of CSiR and firm value is more pronounced for firms with long-term orientations and for firms domiciled in countries where demand for socially responsible corporate activities is high. Our findings support the role that CSiR plays in corporate reputation and explain the heterogeneity of the relation between CSiR and firm value across firms and countries.