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Paper by Samuel Stäbler accepted in the Journal of Marketing

Published: 18th February 2020 Last updated: 03rd March 2020

A paper by Samuel Stäbler (co-authored with Marc Fischer, university of Cologne) has been accepted for publication in the Journal of Marketing. This study offers important insights into the world of media and how they report on brand transgression.

Title: "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 causes damage to 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 a significant number of 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 only reacts to the event if 4 or more U.S. high-reach media outlets report on the event.