The impact of corporate social irresponsibility media coverage on firm performance

This paper aims to assess the impact of corporate social irresponsibility (CSiR) media coverage on firm performance in India. It also analyses the effects of the environment, social, governance, and cross-cutting issues on firm performance.

The paper utilizes a sample of Indian firms from the Reprisk^® database, amounting to 1,103 CSiR media coverage counts for 693 firm-year annual observations from 2008 to 2015. Further, Reprisk^® segregates comprehensive CSiR coverage counts into the environment, social, governance and cross-cutting issues, for which the study runs the fixed effects panel regression. The study takes year-fixed effects, industry-fixed effects and clustered standard errors at the industry level.

The results of this study indicate that CSiR coverage negatively influences the firm performance of Indian firms. All issues, including social, governance and cross-cutting, except environmental issues, negatively impact firm value in India.

The involvement of firms in CSiR costs the firms financially and drives down firm performance. Social issues, including community and employee-related matters, governance issues and cross-cutting issues, also reduce the firm performance.

The insignificant environmental impact on firm performance does not indicate that environmental issues have no detrimental consequences. Instead, it might need more stakeholders' awareness to understand the harmful implications of environmental issues on society.

Limited studies have explored CSiR in India so far. The study is novel as it analyses the Reprisk^® database and its segregation of media counts into the environment, social, governance and cross-cutting issues in the Indian context.