(The) role of the media in promoting Korean firms’ voluntary disclosure of ESG performance

Abstract

In the context of growing concerns and demands on corporate sustainable practices, firms are facing pressures to disclose relevant information. Previous studies that analyzed motivations of voluntary disclosure identified media visibility as one of the powerful determinants based on legitimacy theory and agenda-setting theory. Whereas most studies focus on how media attention on a firm or news coverage of negative corporate events prompts companies to report their non-financial information, whether general media tone influences companies’ disclosure decisions have been an elusive study. By analyzing 7-year panel data of 182 Korean companies, this study explores the moderating effect of media tone on the relationship between media visibility and Environmental Social and Governance (ESG) disclosure as well as whether positive media tone encourages companies to publish a sustainability report. The findings indicate that media-visible firms receiving favorable news are more likely to report ESG information compared to non-media visible companies in order to satisfy increased social expectations.