Why bad news can be good news: the signaling feedback effect of negative media coverage of corporate irresponsibility

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Can bad news also be good news? In this study, I explicate why bad news about firms’ corporate social irresponsibility (CSiR) can be good news for firms. Specifically, I address the role of negative media coverage of CSiR in firms’ corporate social performance (CSP). Drawing on signaling theory, I propose that negative media coverage of CSiR is a form of costly yet effective external feedback to firms’ current social signaling. It, therefore, propels firms to undertake organizational changes to send positive response signals through improved CSP. Furthermore, I argue that this effect is augmented by organizational innovation search, which influences firms’ learning capacity required to improve firms’ CSP. Using a multicountry sample of 1,049 firms between 2007 and 2016, I find that negative media coverage of CSiR induces firms to enhance CSP, and this effect is moderated by organizational innovation search.

Original languageEnglish
Number of pages28
JournalOrganization and Environment
Publication statusAccepted/In press - 2022
Externally publishedYes


  • corporate social performance (CSP)
  • corporate social responsibility (CSR), innovation search
  • nonfinancial disclosure
  • R&D
  • signaling theory

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