Media Coverage, Corporate Social Responsibility And Firm Value

Currently, China is in a critical period of deepening reform and opening-up, accelerating the transformation of economic development pattern, and building a harmonious society. However, besides of high GDP (Gross Domestic Product), there are existed a serious of problems due to the lack of corporate social responsibility, such as the frequent occurrence of environment pollution, the use of illegal cooking oil, and food safety problems. Therefore, Corporate Social Responsibility (CSR) has become one of the focuses of social concern. The releases of Guidelines on Corporate Social Responsibility by Shenzhen Stock Exchange on September25th in2006and Guidance on the central government-owned enterprises to fulfill their social responsibility by State-owned Assets Supervision and Administration Commission in2008, advocate enterprises to actively fulfill their social responsibilities. Given this background, the related research of CSR has become the focus in academia.With the development of modern science and technology, as well as the rapid rise of the media, the news media, such as newspapers, television and Internet, plays an increasingly important role in the direction of public opinion and information intermediaries. Enterprises of any dishonorable things will be exposed by the news media to receive the condemnation and punishment from all sectors of the community. However, enterprises of fulfillment of CSR actively will be widely advocated to receive the praise and reward. Media coverage of CSR can increase the visibility of the fulfillment of CSR. Moreover, enterprises could obtain high revenue due to active public responsibility response.In this dissertation, A-share listed companies which released the CSR report of CSR of2010,2011are selected as the samples. The score results for the listed company’s CSR report conducted by the third-party social responsibility rating agency, Rankings CSR Ratings (RKS), are chosen to evaluate the fulfillment of CSR. First of all, this paper investigates the relationship between the fulfillment of CSR and enterprise value. The empirical results indicate that the active fulfillment of CSR contributes to the improvement of corporate value. In addition, other factors, such as the size of business, the nature of the ultimate controlling shareholder and asset-liability ratio will exert some influence on firm value.On this basis, this paper studies the influence of the media concern about the fulfillment of CSR of listed companies on firm value. As an important aspect of the external governance environment, the news media has played an increasingly important role. The public will make a value judgment based on the information about the fulfillment of CSR of listed companies. Moreover, accompanied by appropriate behavior response, the above value judgment will reflect on the corporate financial performance and firm value. In the case of listed companies to fulfill their social responsibility, the significant impact of positive media coverage on firm value is investigated in this dissertation. Then, this paper divides the sample companies into high and low two groups according to the results of social responsibility ratings, in order to verify that the more of media coverage of corporate social responsibility, the more improvement of firm value. Especially in the low group, the positive media coverage will have more influence on firm value.