This paper investigates whether regional negative public sentiment associated with extreme non-financial social shocks (e.g., violence or crime) will affect the resident firms’ M&A announcement return. Using a sample of 3,200 M&A deals in China, our empirical results consistently show that M&A announcement return is significantly lower after the firm’s headquarter city has experienced negative social shocks. We further find that better CSR performance helps to mitigate the impact of these negative shocks. Overall, we show that firm operations will be largely affected by the resident environment and location, and better CSR performance acts as an effective risk management strategy.

This study investigates how digital transformation affects public sentiment toward firms on social media platforms in China. Using 2008-2022 data on Chinese listed companies and multivariate regression analysis, this paper identifies that digital transformation boosts positive online comments and sentiment. This relationship is mediated by gains in total factor productivity from digital initiatives. Moreover, concurrent green transformation positively moderates the effect, amplifying the impact of digital moves on online positive sentiment. Heterogeneous results reveal that the digital transformation effect on online positive sentiment is greater for state-owned, high-tech, and large companies. To our knowledge, this is the pioneering study to examine the linkage between corporate digital transformation and online public sentiment. The findings reveal whether, how, and when digital transformation shape more favorable public sentiment and online buzz. Companies can leverage digitalization, productivity improvements, and green development to foster positive perceptions and enhance their online reputation.

In the information age, major negative events can spread quickly and affect investor perceptions and decisions. Selecting major violent crime events in China, we investigate the role of corporate social responsibility (CSR) in mitigating regional negative public sentiment. We find that the firms with better CSR performance have higher stock returns around the event day. We also find that investors react more positively for firms engaging in technical CSR activities (those targeting a firm’s primary stakeholders) than institutional CSR activities (those serving the public). Moreover, the effect is more pronounced for firms with better internal control quality and higher information transparency. Overall, this study documents a positive role of CSR in securing firm value in the face of negative public sentiment.