When Does Corporate Social Irresponsibility Become News? Evidence from More Than 1,000 Brand Transgressions Across Five Countries

Abstract

Companies are increasingly held accountable for their corporate social irresponsibility (CSI). However, the extent to which a CSI event damages the firm largely depends on the coverage of this event in high-reach news media. Using the theory of news value developed in communications research, the authors explain the amount of media coverage by introducing a set of variables related to the event, the involved brand, and media outlet. The authors analyze a sample of 1,054 CSI events that were reported in 77 leading media outlets in five countries in the period 2008-2014. Estimation results reveal many drivers. For example, the number of media covering the story may be 39% higher for salient and strong brands. 80% more media report the event if a foreign brand is involved in a domestic CSI event. When a brand advertises heavily or exclusively in a news medium, this reduces the likelihood of the news medium to cover negative stories about the brand. The average financial loss at the U.S. stock market due to a CSI event amounts to US$321 million. However, the market reacts to the event only if 4 or more U.S. high-reach media outlets report on the event.

The marketing–finance interface: A new integrative review of metrics, methods, and findings and an agenda for future research

“…3 First, finance/accounting studies mainly focus on interesting empirical phenomena using unique databases, such as daily advertising data (Focke et al, 2020) and Amazon.com product reviews (Huang, 2018). The theory section in marketing articles is often lengthier, and a higher percentage of studies are explicitly based on finance theories such as stakeholder theory (Wies et al, 2019), psychology-based concepts such as associative network theory (Borah & Tellis, 2016), and interdisciplinary theories such as news value theory (Stäbler & Fischer, 2020).…”

Not All Wrongdoers Are Equal in the Public Eye: A Moderated Mediation Model of Country Stereotypes, Condemning Emotions, and Retaliatory Intent in Corporate Crises

“…This is surprising given that a substantial body of international marketing research demonstrates that a company’s or brand’s COO (e.g., Allman et al 2015; Choi et al 2016; Herz and Diamantopoulos 2017; Tran and Paparoidamis 2020) and associated country stereotypes (e.g., Chattalas, Kramer, and Takada 2008; Chen, Mathur, and Maheswaran 2014; Diamantopoulos et al 2017; Halkias, Davvetas, and Diamantopoulos 2016; Magnusson, Westjohn, and Sirianni 2019) can shape consumer behavior toward companies and brands in noncrisis settings. The notion that a company’s COO might also matter in the context of corporate crises is supported by recent evidence showing that wrongdoings of foreign brands receive 80% more media coverage (in terms of number of stories) than wrongdoings of domestic brands (Stäbler and Fischer 2020). However, little is known about how and under what circumstances country stereotypes might affect consumer retaliatory intent when corporate crises are appraised.…”

The street music business: consumer responses to buskers performing on the street and on online video platforms

“…We conducted several further tests to ensure robustness. First, following prior research (Stäbler & Fischer, 2020), we used an inductive approach to test for potential interaction effects among our focal variables (Appendix 5). None of the interactions were significant or met the statistical requirements.…”

“…Following prior research (Stäbler & Fischer, 2020), we used an inductive approach and tested for potential interaction effects among our focal variables.…”