Media coverage and impression management in corporate social responsibility reports
Authors: Zhang Zhengyong , Chen Hong 
Published: November 2019

Purpose
Because corporate social responsibility (CSR) reports in China are surging in quantity but are low in quality, impression management in CSR reports has become a hot research topic in recent years. This paper aims to research whether and how media coverage affects CSR report impression management and whether CSR report disclosure attributes have different regulating effects.

Design/methodology/approach
Based on the effective supervision hypothesis and the market pressure hypothesis, this study uses Heckman’s two-stage regression model to examine the effect of media coverage on CSR report impression management from the perspective of managers’ self-interest.

Findings
The results support the market pressure hypothesis, which suggest that firms with higher levels of media coverage are more likely to engage in CSR report impression management, and this effect is especially significant in firms with a higher proportion of institutional investor shareholding and more analysts tracking. Further cross-sectional group studies show that market pressure is only present in firms whose CSR reports are subject to mandatory disclosure without third-party assurance or policy-oriented media attention.

Research limitations/implications
This paper does not consider the attention of other forms of media. The findings of this paper has policy implications for a better understanding of the motivation underlying impression management in CSR reports, encouraging voluntary disclosure and assurance to relieve the market pressure from media coverage.

Practical implications
From the perspective impression management of social responsibility report, further understanding the governance role of media coverage. A large number of previous literatures have shown that media coverage has a good supervisory role, but these studies mainly focus on the financial level of enterprises. Media coverage seems to be a “double-edged sword”. While it plays a supervisory role and inhibits earnings management or irregularities at the financial level, it also brings enormous market pressure to the enterprises, which is reflected in the increase of impression management behavior of social responsibility reports at the non-financial level, and this pressure is probably caused by the financial level.

Social implications
Voluntary disclosure and verification of social responsibility reports, as an important mechanism to improve the quality of social responsibility reports, supports the correctness, scientificity and rationality of the current policies of the SFC and the exchange on encouraging voluntary disclosure and verification. In the future, changing regulatory thinking, encouraging voluntary disclosure of social responsibility reports and introducing more independent and authoritative certification agencies should be the direction and focus of policy-making, so that social responsibility reports can play a better role in helping investors make decisions.

Originality/value
From the perspective of impression management of CSR reports, this paper provides evidence regarding the effect of media coverage and its transmission mechanisms. This paper uses China's unique institutional environments to study the impact of different types of media coverage on impression management in CSR reports in emerging market economy. Different from the institutional environment of developed countries such as the USA, mandatory disclosure and voluntary disclosure coexist in CSR reporting in China. The authors provide critical evidence to show that third-party assurance and voluntary disclosure improves the quality of CSR reports.