Title

The Impact of Media Reputation on Firm Performance and Market Returns

Translated Titles

媒體聲譽對公司績效與市場報酬之影響

DOI

10.6504/JOM.2016.33.04.03

Authors

魏裕珍(Yu-Chen Wei);許嫣茹(Yen-Ju Hsu);盧陽正(Yang-Cheng Lu);黃嘉淇(Chia-Chi Huang)

Key Words

Media reputation ; Firm performance ; Media coverage ; News sentiment ; Business cycle ; 媒體聲譽 ; 公司績效 ; 媒體曝光度 ; 新聞情緒 ; 景氣循環

PublicationName

管理學報

Volume or Term/Year and Month of Publication

33卷4期(2016 / 12 / 01)

Page #

587 - 616

Content Language

英文

Chinese Abstract

This study employs the linguistic analysis for the construction of media reputation proxies (including media coverage and news sentiment) and investigates the relationship between media reputation and firm performance by examining the stocks of all firms listed on the Taiwan Stock Exchange. We apply two-stage least squares regression model to deal with the potential endogeneity problem between media reputation and firm performance arising from firm-specific characteristics. The results suggest that firms attract media coverage outperform those firms without such coverage; they also indicate that previous media reputation has a significantly positive impact on current firm performance, as measured by the market-to-book ratio and the return on assets, whilst media reputation is found to have a negative impact on stock market returns, with higher media attention potentially following a reversal in stock market expectations and returns (Barber & Odean, 2008; Fang & Peress, 2009). Besides, the superior firm performance could enhance the subsequent corporate media reputation. Further, we document that when taking the business cycle into consideration, asymmetric influences are discernible between media reputation and firm performance. Generally, the results reveal bi-directional interaction between media reputation and firm performance, and therefore firms do to improve profitability also enhance their media reputations.

English Abstract

本研究運用文辭語意解析方法建構新聞資訊反映之媒體聲譽變數,包含媒體曝光度及運用文本語意轉換分析法建立之新聞情緒指數,探討臺灣證券市場上市公司之媒體聲譽對於公司績效之影響關係。實證採兩階段最小平方法處理其潛在的內生性問題,結果指出有在媒體曝光之企業,該經營績效顯著優於未曝光的企業。前一季媒體聲譽與公司當期績效呈現正向顯著關係,包括股價淨值比與資產報酬率,而對股票報酬則呈現負向顯著關係,顯示市場關注程度越高將導致市場績效反轉 (Baber & Odean, 2008; Fang & Peress, 2009);另外,公司績效好將有助於增進下一季公司的媒體聲譽。研究進一步發現,不同的市場景氣狀態會對媒體聲譽與公司績效的關聯性產生不對稱的影響效果。綜合上述,媒體聲譽對公司績效存在顯著的相互影響關係;因此,經營公司績效的同時,也應管理其媒體聲譽。

Topic Category 社會科學 > 管理學
Reference
  1. Chih, H. H.,Lin, Y. E.,Chen, W. R.,Chou, P. H.(2009).Does CEO media coverage affect firm performance?.Chiao Da Management Review,29(1),139-173.
    連結:
  2. Jang, W. Y.,Yang, H. C.,Chen, C. Y.(2014).The effects of media coverage on financial performance and stock price.Review of Securities and Futures Markets,26(1),113-146.
    連結:
  3. Lu, Y. C.,Wei, Y. C.(2014).Media impact around earnings announcement dates with consideration of investor types and market scenarios.Journal of Financial Studies,22(3),73-104.
    連結:
  4. Lu, Y. C., Chen, J. N., Ker, S. J., & Wei, Y. C. 2015. Methods for sentimental analysis of news text. Invention patents in Taiwan, Patent No. I 477987.
  5. Demers, E., & Vega, C. 2014. Understanding the role of managerial optimism and uncertainty in the price formation process: Evidence from the textual content of earnings announcements. Working paper, University of Virginia, Virginia
  6. Aman, H.(2011).Firm-specific volatility of stock returns, the credibility of management forecasts, and media coverage: Evidence from Japanese firms.Japan and the World Economy,23(1),28-39.
  7. Andres, C.,Betzer, A.,Limbach, P.(2014).Underwriter reputation and the quality of certification: Evidence from high-yield bonds.Journal of Banking & Finance,40,97-115.
  8. Arshadi, N.,Lawrence, E. C.(1987).An empirical investigation of new bank performance.Journal of Banking & Finance,11(1),33-48.
  9. Barber, B. M.,Odean, T.(2008).All that glitters: The effect of attention and news on the buying behavior of individual and institutional investors.Review of Financial Studies,21(2),785-818.
  10. Black, E. L.,Carnes, T. A.,Richardson, V. J.(2000).The market valuation of corporate reputation.Corporate Reputation Review,3(1),31-42.
  11. Brammer, S. J.,Pavelin, S.(2006).Corporate reputation and social performance: The importance of fit.Journal of Management Studies,43(3),435-455.
  12. Chung, S. L.,Hung, C. H.,Yeh, C. Y.(2012).When does investor sentiment predict stock returns?.Journal of Empirical Finance,19(2),217-240.
  13. Deephouse, D. L.(2000).Media reputation as a strategic resource: An integration of mass communication and resource-based theories.Journal of Management,26(6),1091-1112.
  14. Doukas, A. J.,Guo, J.,Lam, H. Y. T.,Xiao, S.(2016).Media endorsements of new product announcements: A new marketing strategy.European Management Journal,22(3),394-426.
  15. Dowling, G.(2006).How good corporate reputations create corporate value.Corporate Reputation Review,9(2),134-143.
  16. Durbin, J. M.(1954).Error in variables.Review of the International Statistical Institute,22,23-32.
  17. Dutta, S.,Reichelstein, S.(2005).Accrual accounting for performance evaluation.Review of Accounting Studies,10(4),527-552.
  18. Engelberg, J.,Parsons, C.(2011).The causal impact of media in financial markets.Journal of Finance,66(1),67-97.
  19. Fang, L.,Peress, J.(2009).Media coverage and the crosssection of stock returns.Journal of Finance,64(5),2023-2052.
  20. García, D.(2013).Sentiment during recessions.Journal of Finance,68(3),1267-1300.
  21. Hausman, J. A.(1978).Specification tests in econometrics.Econometrica,46(6),1251-1271.
  22. Keats, B.(1990).Diversification and business economic performance revisited: Issues of measurement and causality.Journal of Management,16(1),61-72.
  23. Kotha, S.,Rajgopal, S.,Rindova, V.(2001).Reputation building and performance: An empirical analysis of the top-50 pure internet firms.European Management Journal,19(6),571-586.
  24. Lee, C.(2011).Underwriter reputation and the decision to go public.Journal of Financeand Accountancy,6,108-128.
  25. Lee, W. C.,Chih, H. H.,Chou, S. F.(2008).Media coverage of CEOs performance: Does corporate governance matter?.Review of Securities and Futures Markets,20(3),71-102.
  26. Liu, X.,Ritter, J. R.(2011).Local underwriter oligopolies and IPO underpricing.Journal of Financial Economics,102(3),579-601.
  27. Maden, C.,Arikan, E.,Telci, E. E.,Kantur, D.(2012).Linking corporate social responsibility to corporate reputation: A study on understanding behavioral consequences.Procedia - Social and Behavioral Sciences,58,655- 664.
  28. McGuire, J. B.,Schneeweis, T.,Branch, B.(1990).Perceptions of firm quality: A cause or result of firm performance.Journal of Management,16(1),167-180.
  29. McLean, R. D.,Zhao, M.(2014).The business cycle, investor sentiment, and costly external finance.Journal of Finance,69(3),1377-1409.
  30. Melo, T.,Garrido-Morgado, A.(2012).Corporate reputation: A combination of social responsibility and industry.Corporate Social Responsibility and Environmental Management,19(1),11-31.
  31. Nofsinger, J. R.(2001).The impact of public information on investors.Journal of Banking &Finance,25(7),1339-1366.
  32. Paniagua, J.,Sapena, J.(2014).Business performance and social media: Love or hate?.Business Horizons,57(6),719-728.
  33. Panico, M.,Raithel, S.,Michel, E.(2014).The effect of media coverage on employer reputation.Journal of Media Economics,27(4),181-198.
  34. Roberts, P. W.,Dowling, G. R.(2002).Corporate reputation and sustained superior financial performance.Strategic Management Journal,23(12),1077-1093.
  35. Rose, C.,Thomsen, S.(2004).The impact of corporate reputation on performance: Some Danish evidence.European Management Journal,22(2),201-210.
  36. Smales, L. A.(2015).Asymmetric volatility response to news sentiment in gold futures.Journal of International Financial Markets, Institutions & Money,34,161-172.
  37. Stock, J. H.,Wright, J. H.,Yogo, M.(2002).A survey of weak instruments and weak identification in generalized method of moments.Journal of Business and Economic Statistics,20(4),518-529.
  38. Tetlock, P. C.(2007).Giving content to investor sentiment: The role of media in the stock market.Journal of Finance,62(3),1139-1168.
  39. Tong, S.-C.(2013).Media reputation in initial public offerings: A study of financial news coverage in Hong Kong.Public Relations Review,39(5),470-483.
  40. Vega, C.(2006).Stock price reaction to public and private information.Journal of Financial Economics,82(1),103-133.
  41. Wry, T.,Deephouse, D. L.,McNamara, G.(2006).Substantive and evaluative media reputations among and within cognitive strategic groups.Corporate Reputation Review,9(4),225-242.
  42. Wu, D. M.(1973).Alternative tests of independence between stochastic regressors and disturbances.Econometrica,41(4),733-750.
Times Cited
  1. 黃鐵嶺(2017)。壽險業獲企業獎項與其經營績效之研究。淡江大學保險學系保險經營碩士在職專班學位論文。2017。1-63。