Does CEO Media Coverage Affect Firm Performance?

Translated Titles





池祥萱(Hsiang-Hsuan Chih);林煜恩(Yu-En Lin);陳韋如(Wei-Ru Chen);周賓凰(Pin-Huang Chou)

Key Words

媒體曝光度 ; 公司績效 ; 行為財務學 ; Media coverage ; Firm performance ; Behavioral finance



Volume or Term/Year and Month of Publication

29卷1期(2009 / 06 / 01)

Page #

139 - 173

Content Language


Chinese Abstract


English Abstract

In this paper, we provide an empirical analysis of the impact of CEO media coverage on the corporate fundamental and market value constructing the media coverage of Taiwan CEO database. We find that CEO media coverage significant affects the cognition of the public, and further influence firm's operating performance. We also find that whether CEO media coverage provides information about firm's fundamentals, it will simulate investors' trading behavior and fluctuate the stock returns. The empirical results of this paper arc summarized as follows. First, the media pay more attention to the firm CEOs with better ROA, worse stock return, larger size, older age and group firms. Second, the CEO media coverage affects ROA positively in the short run because of efficient operation, while negatively in the long run because of worse profitability. Third, the bigger amount of CEO' media coverage is, the larger the drop in the current and future stock returns. The main reasons are information asymmetry and the market investors' overreaction. Finally, if the firms have more positive media coverage, the market performance will decline but the ROA will increase. Comparing with the group firms, the non-group firms can increase ROA by increasing CEO media coverage, especially positive or company-related news.

Topic Category 社會科學 > 管理學
  1. Adams, R. B.,Almeida, H.,Ferreira, D.(2005).Powerful CEOs and Their Impact on Corporate Performance.Review of Financial Studies,18(4),1403-1432.
  2. Baker, M.,Ruback, R.,Wurgler, J.,Espen Eckbo (ed.)(2006).Handbook of Corporate Finance: Empirical Corporate Finance.Amsterdam, Netherlands:North-Holland.
  3. Ball, R.,Kothari, S.,Shanken, J.(1995).Problems in Measuring Portfolio Performance: An Application to Contrarian Investment Strategies.Journal of Financial Economics,38(1),79-107.
  4. Barber, B. M.,Lyon, J. D.(1997).Detecting long-run abnormal stock returns: The empirical power and specification of test statistics.Journal of Financial Economics,43(3),341-372.
  5. 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.
  6. Blume, M.,Stambaugh, R.(1983).Biases in Computed Returns: An Application to the Size Effect.Journal of Financial Economics,12(3),387-404.
  7. Brennan, M. J.,Hughes, P. J.(1991).Stock Prices and the Supply of Information.Journal of Finance,46(5),1665-1691.
  8. Working paper
  9. Carhart, M.(1997).On Persistence in Mutual Fund Performance.Journal of Finance,52(1),57-82.
  10. Core, J. E.,Holthausen, R. W.,Larcker, D. F.(1999).Corporate Governance, Chief Executive Officer Compensation, and Firm Performance.Journal of Financial Economics,51(3),371-406.
  11. Daily, C. M.,Johnson, J. L.(1997).Sources of CEO Power and Firm Financial Performance: A Longitudinal Assessment.Journal of Management,23(2),97-117.
  12. 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.
  13. Dick, A.,Basu, K.(1994).Customer Loyalty: toward an Integrated Conceptual Framework.Journal of the Academy of Marketing Science,22(2),99-113.
  14. Dutta, S.,Reichelstein, S.(2005).Stock Price, Earnings and Book Value in Managerial Performance Measures.The Accounting Review,80(4),1069-1100.
  15. Easley, D.,O''Hare, M.(2004).Information and the Cost of Capital.Journal of Finance,59(4),1553-1583.
  16. Eichholz, M.(1999).Judging by Media Coverage? CEO Images in the Press and the Fortune America's Most Admired Companies Survey.Paper Presented at the Annual Conference of the International Communication Association,San Francisco:
  17. Fang, L.,Peress, J.(2007).Media Coverage and the Cross-Section of Stock Returns.Journal of Finance.
  18. Farinha, J.(2003).Dividend Policy, Corporate Governance and the Managerial Entrenchment Hypothesis: An Empirical Analysis.Journal of Business Finance and Accounting,10,1173-1209.
  19. Fenn, G. W.,Liang, N.(2001).Corporate Payout Policy and Managerial Stock Incentives.Journal of Financial Economics,60(1),45-72.
  20. Fombrun, D.,Shanley, M.(1990).What's in a Name? Reputation Building and Corporate Strategy.Academy of Management Journal,33(2),233-258.
  21. Gaines-Ross, L.(2000).CEO Reputation: The New Factor in Shareholder Value.Directorship,26(5),366-370.
  22. Garay, U.,Gonzalez, M.,Molina, C. A.(2007).Firm Performance and CEO Reputation Costs: New Evidence from Venezuelan Banks.Emerging Markets Finance and Trade,43(3),16-33.
  23. Garbett, T.(1988).How to Build a Corporation's Identity and Project its Image.Lexingtion, MA:Lexington.
  24. Graham, J. D.,Caywood Clake (ed.)(1997).The Handbook of Strategic Public Relations and Integrated Communications.New York, NY:McGraw-Hill.
  25. Guay, W.,Harford, J.(2000).The Cash Flow Permanence and Information Content of Dividend Increases vs. Repurchases.Journal of Financial Economics,57(3),385-416.
  26. Working Paper
  27. Hausman, J. A.(1978).Specification Tests in Econometrics.Econometrica,46(6),1251-1271.
  28. Khurana, R.(2002).Searching for a Corporate Savior: The Irrational Quest for Charismatic CEOs.Princeton, NJ:Princeton University Press.
  29. Klibanoff, P.,Lamont, O.,Wizman, T. A.(1998).Investor Reaction to Salient News in Closed-End Country Funds.Journal of Finance,53(2),673-699.
  30. Kotler, P.,Andreasen, A. R.(1996).Strategic marketing for nonprofit organizations.Upper Saddle River, NJ:Prentice-Hall.
  31. Working Paper
  32. Mazur, L.(1999).Time to Buff the Chief Executive's Global Charisma.Marketing (UK),20
  33. Merton, R.(1987).A Simple Model of Capital Market Equilibrium with Incomplete Information.Journal of Finance,42(3),483-510.
  34. Working paper
  35. Milbourn, T. T.(2003).CEO Reputation and Stock-Based Compensation.Journal of Financial Economics,68(2),233-262.
  36. Mittal, B.(1989).Must Consumer Involvement always Imply more Information Search?.Advances in Consumer Research,16(1),167-172.
  37. Nguyen, N.,Leblanc, G.(2001).Corporate Image and Corporate Reputation in Customers' Retention Decisions in Services.Journal of Retailing and Consumer Service,8(4),227-236.
  38. Opler, T.,Titman, S.(1993).The Detenninants of Leveraged Buyout Activity: Cash Flow vs. Financial Distress Costs.Journal of Finance,48(5),1985-1999.
  39. Park, D. J.,Berger, B. K.(2004).The Presentation of CEOs in the Press, 1990-2000: Increasing Salience, Positive Valence, and a Focus on Competency and Personal Dimensions of Image.Journal of Public Relations Research,16(1),93-125.
  40. Pei-Shiou, Liu,Shian-Huei, He,Cheng-Shian, Liu(2005).The Rating of Compensation of Chairmen of Board of Listed in 2004: "Finds out the Boss Who Feathers His Nest".Business Week,919,71-86.
  41. Pincus, J. D.,Rayfield, R. E.,Cozzens, M. D.(1991).The Chief Executive Officer's Internal Communication Role: A Benchmark Program of Research.Public Relations Research Annual,3(1),1-35.
  42. Rindova, V.,Williamson, I.,Petkova, A.,Sever, J. M.(2005).Being Good or Being Known: An Empirical Examination of the Dimensions, Antecedents, and Consequences of Organizational Reputation.Academy of Management Journal,48(6),1033-1049.
  43. Roberts, P.,Dowling, G.(2002).Corporate Reputation and Sustained Superior Financial Performance.Strategic Management Journal,23(12),1077-1093.
  44. Robinson, J. P.,Levy, M. R.(1996).News Media Use and the Informed Public: A 1990s Update.Journal of Communication,46(2),129-135.
  45. Roll, R.(1983).On Computing Mean Returns and the Small Firm Premium.Journal of Financial Economics,12(3),371-386.
  46. Schuler D. A.,Cording, M.(2006).A corporate social performance-corporate financial performance behavioral model for consumers.Academy of Management Review,31(3),540-558.
  47. Shih-Fan, Wang.Communication Content Analysis: Theory and Practice.Taipei:Youth.
  48. Skolnik, R.(1994).Portraits of the "Most Admired" Companies: How Public Relations Help Build Corporate Reputations.Public Relations Journal,50(5),14-18.
  49. Smith, Jr. C. W.,Watts, R. L.(1992).The investment Opportunity Set and Corporate Financing, Dividend, and Compensation Policies.Journal of Financial Economics,32(3),263-292.
  50. Straughan, D.,Bleske, G. I.,Zhao, X.(1996).Modeling Format and Source Effects of an Advocacy Message.Journalism and Mass Communication Quarterly,73(1),135-146.
  51. Tetlock, P. C.(2007).Giving Content to Investor Sentiment The Role of Media in the Stock Market.Journal of Finance,62(3),1139-1168.
  52. Urrutia, J. L.,Vu, J. D.(1999).Is it Good or Bad to Mark the Cover of Business Week?.Quarterly Journal of Business and Economics,38(1),64-75.
  53. Useem, J.(2001).Conquering Vertical Limits.Fortune,143(4),84-89.
  54. Vaughn, R.(1980).How Advertising Works: A Planning Model.Journal of Advertising Research,20(5),28-29.
  55. Wartick, S. L.(1992).The Relationship between Intense Media Exposure and Change in Corporate Reputation.Business and Society,31(1),33-49.
Times Cited
  1. 張慈玲(2012)。公司多角化、研發支出與公司績效。中央大學會計學研究所學位論文。2012。1-64。
  2. 林智勇(2015)。投資人注意力與營收宣告的效果。臺北大學企業管理學系學位論文。2015。1-67。