New research reveals loss of local newspapers increases organizational wrongdoing

A pile of newspapers tied with a string

A paper from York University’s Schulich School of Business shows that the decline in local newspapers has led to a rise in organizational wrongdoing within communities.

The media has a long history of serving as a societal watchdog, offering accountability journalism that can keep organizational wrongdoing – such as misconduct, fraud, bribery, tax evasion and more – in check.

Schulich School of Business
The Schulich School of Business

The decline in local newspapers due to financial challenges, however, has had a significant impact on accountability journalism, according to “The Crisis in Local Newspapers and Organizational Wrongdoing: The Role of Community Social Connectedness,” a paper published in Organization Science by two York-affiliated academics.

The paper was co-authored by Mike Valente, an associate professor of business and sustainability at the Schulich School of Business, as well as Tony Jaehyun Choi, an assistant professor in the Business-Society Management Department at Rotterdam School of Management and a former PhD student of Valente.

“Because local newspapers, through their general watchdog function, play an instrumental role in balancing economic and non-economic values, we investigated whether the significant decline in local newspapers in U.S. municipalities weakened the enforcement mechanism that would normally curb organizational wrongdoing,” says Valente.

The two academics analyzed local newspapers and organizations in American metropolitan areas during the period between 2007 and 2015 and found that the decline in local newspapers has led to an increase in opportunistic behaviors from organizations due to the diminishing presence of accountability journalism.

“Our results in fact show that a decline in local newspapers increases organizational wrongdoing,” adds Valente. The academics discovered, however, that another watchdog is gaining strength in the absence of the strong interconnection of accountability journalism and organizational responsibility.

“This relationship is moderated by community social connectedness, which is defined as the dense interlocking network of relationships between local people in a community. Community social connectedness ultimately compensates for the scarcity of local newspapers by essentially replacing news outlets as an enforcement body,” says Valente.