Abstract:
Online news media coverage of corporate environmental investment has gradually increased in recent years, drawing broad attention from investors, financial institutions, and regulators. Currently, empirical evidence on how such coverage affects corporate behavior and the associated economic consequences remains scarce. This paper innovatively employs GPT large language models to conduct textual analysis of listed companies' financial statements and news reports, and empirically examines the impact and underlying mechanisms of online news media coverage on corporate front-end preventive and end-of-pipe governance environmental investment behavior. This study finds that online news media coverage can significantly enhance the overall level of corporate environmental investment, primarily manifested as a driving effect on end-of-pipe governance environmental investment. The mechanism analysis reveals that online news media coverage may increase stock price volatility risk, intensify inquiries from regulators, and exacerbate corporate financing constraints. To release positive signals to the market in the short term, firms tend to implement end-of-pipe governance environmental investments. Further analysis indicates that the impact of online news media coverage on corporate environmental investment behavior is more significant when firms operate in non-heavily polluting industries and when executives possess stronger environmental awareness. By shaping corporate environmental investment behavior, online news media coverage mitigates both overinvestment and underinvestment, thereby enhancing corporate investment efficiency. This paper provides valuable insights for deepening the understanding of the mechanisms through which online news media influence corporate environmental decision-making and for promoting the achievement of environmental sustainability goals.
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