The Real Effect of Local Media on Firms’ Environmental Responsibility : Evidence from Toxic Emissions

This paper examines the impact of local media coverage on firm’s environmental performance using the closures of local newspapers as staggered shocks to local media coverage. I find that firm plants located in areas with reduced local media coverage significantly increase toxic emissions to save production costs. The effect is stronger when the firm owning the plant directly sells goods to end consumers or mainly serves local customers, and when managers exhibit greater short-termism. This effect is weaker when firm plants are monitored by other pro-environmental activists. Collectively my findings suggest that local media play an important role in forcing firms to be environmentally responsible, partly by raising customers’ environmental awareness and by restricting managerial myopia