Voting by Mouth: Media Attention and Environmental Governance

Abstract

Abstract External oversight is critical to enhancing environmental protection. In this paper, we investigate the implication of media attention on corporate environmental governance during the period 2011–2021 by taking China’s public companies as samples. The empirical results indicate that media attention can significantly and persistently amplify corporate environmental governance, and this result is stable after considering both endogeneity and a series of alternative robustness tests. Additionally, in areas with higher marketization and better rules of law environments, media attention can be better in favor of improving corporate environmental performance. Further analysis finds that media attention is favorable to corporate environmental governance through the "supervisory effect" mechanisms, including raising public awareness, improving internal management efficiency, as well as leveraging innovation to reduce environmental damage. The conclusions of this study provide empirical evidence for enhancing external supervision and corporate governance.