Private Politics, Dynamics of Negative Media Exposure and Firm Strategy

Negative media exposure and the damaging impact it can have on a firm’s reputation is at the heart of the Private Politics and the Social Movements literatures. However, these literatures ignore the fact that media reports could have cumulative effects over time, leading to negative spirals that could create detrimental reputational effects, but also that firms might be able to prevent these spirals. In this paper, we develop a theory of dynamic media exposure, suggesting that negative news regarding a company’s environmental records increase the likelihood of subsequent negative exposure of the same type, threatening a company’s reputation beyond the short-run and potentially turning this firm into an environmental villain. However, we also show that companies can prevent such negative spirals by nurturing positive environmental news and issuing press releases about their environmental progress. We test our hypotheses with a unique 20-year panel-dataset of media articles on the 30 largest US-companies, and find support for our hypotheses. We discuss how these results broaden our understanding of company-media interactions, and what they imply also regarding sustainability concerns.