Media approval and CSP–CFP translation: the role of institutional development in an emerging market

Building on stakeholder theory, this study examines media approval as a critical yet underexplored mechanism facilitating the translation of corporate social performance (CSP) into corporate financial performance (CFP) in emerging market firms (EMFs). We develop a framework to explore how media approval functions as an influential intermediary by shaping stakeholder perceptions and fostering reciprocity. Specifically, we posit that while CSP enhances media approval, this effect diminishes at higher levels of CSP. In turn, media approval
positively mediates the CSP–CFP relationship. Given the weak institutional environments in which EMFs operate, we further theorize that the effectiveness of media approval as an intermediary depends on the levels of regional institutional development. In regions with higher institutional development, stakeholders have access to alternative sources of credible information, reducing their reliance on media narratives and thereby weakening the
mediation effect of media approval in the CSP–CFP translation. Employing generalized least squares estimation and several robustness analyses, we analyzed a panel dataset of 2,008 publicly listed Chinese firms from 2010 to 2019. Our findings provide strong support for our hypotheses, highlighting the context-dependent role of media in CSP-driven financial outcomes and the strategic significance of media approval in shaping stakeholder dynamics in emerging markets.