CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE, MEDIA COVERAGE AND FINANCIAL PERFORMANCE: AN EMPIRICAL ANALYSIS IN THE CHINESE CONTEXT

Incorporating instrumental views of corporate social responsibility (CSR), this paper analyzes CSR in the Chinese context to reveal the media-based mechanism, which clarifies how corporate social responsibility disclosure (CSRD) generates shareholder value. Our results show that firms with better CSRD attract more attention in the media, and high CSRD is positively related to corporate financial performance (CFP), partially mediated by the media coverage. With further investigation, we find that the mediating effect of media coverage is significant only in customer-sensitive industries. This study implies that the strategic use of CSRD to create economic benefits for firms may be of value to managers and investors who desire to understand the effect of CSR and media coverage on firm financial performance.