Green dies in darkness? environmental externalities of newspaper closures

• Published in: Review of accounting studies 2024-12, Vol.29 (4), p.3564-3599
• Main Authors: Jiang, John Xuefeng, Kong, Jing
• Format: Article
• Language: English
• Subjects: Accounting/Auditing; Business and Management; Corporate Finance; Industrial plant emissions; Public Finance
• ISSN: 1380-6653; 1573-7136
• DOI: 10.1007/s11142-023-09786-5

U.S. industrial plants emit around four billion pounds of toxic chemicals annually, posing health and economic risks. This study investigates the role of newspapers in influencing plants’ toxic emissions. We use local newspaper closures as an exogenous shock to news coverage and observe a 10% increase in emissions in affected counties, compared to plants owned by the same firm in other counties. Our findings indicate that this increase is not attributable to variations in environmental policies among firms, disparate economic conditions across counties, or heightened production levels at these facilities. Instead the rise in toxic emissions is driven by an elevated amount of toxins emitted per unit of output. We also uncover that the observed effect is more pronounced in areas with a lower newspaper-to-population ratio before the closure and in communities more concerned about environmental issues. Moreover, we find that the spread of online media doesn’t mitigate the consequences of newspaper closures on toxic emissions. This research provides causal evidence that local newspapers monitor and reduce firms’ harmful environmental practices.