Conservative TV and Corporate Social Responsibility

Abstract

We study the impact of exposure to conservative media on firms’ CSR activities using the quasi-natural expansion of Sinclair Broadcast Group: the largest conservative broadcasting network in the U.S. local TV markets. In a difference-in-differences setting, we find that firms significantly reduce CSR activities after exposure to Sinclair TV in all three dimensions: environmental, social, and governance. Consistent with ideology as a driver of our results, the effect is stronger when there is more propensity for the audience to accept Sinclair messaging: for example, for firms belonging to the gun, tobacco, and gambling industries, when Sinclair acquires more Fox-affiliated TV stations, and for those headquartered in Republican-leaning counties. Cross-sectional evidence also suggests stronger effects associated with lower institutional ownership, past prosecution history, or younger CEOs. Related, we find no impact of Sinclair exposure on firms’ accounting performance measured by ROA, but a negative impact on their Tobin’s Q and stock returns.