Media exposure on corporate social irresponsibility and firm performance

Teng, Chia-Chen; Yang, Jing

doi:10.1016/j.pacfin.2021.101604

Cited by 18 publications

(12 citation statements)

References 64 publications

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“…The earnings per share (EPS) metric is a well-known proxy for determining a company's level of profitability along with ROA, ROE, and Tobin's Q and is extensively used in the existing literature to measure the profitability of the firm (e.g. Bennett et al ., 2017; Pirzada et al ., 2015; Rahman et al ., 2019; Ali et al ., 2022: Teng and Yang, 2021; Tang et al ., 2021). Following Kweh et al .…”

Section: Methodsmentioning

confidence: 99%

Do financial constraints moderate the relationship between CEO compensation and firm performance: an emerging market evidence

Farooq

Khan

Noor

2023

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PurposeThe current study aims to investigate the impact of firm performance on chief executive officer (CEO) remuneration in the context of an emerging market, i.e. Pakistan. Further, the interactive effect of financial constraints is investigated in the pay–performance relationship.Design/methodology/approachThe study's sample includes 173 non-financial firms listed on the Pakistan Stock Exchange. This study covers the years 2010–2019. The CEO compensation of the sample firms is measured in terms of salary and bonuses, perquisites and stock options paid to the CEO, whereas firm profitability is measured by return on assets, return on equity, Tobin's Q (Q) and earnings per share. The KZ Index measures the degree of financial constraint. The fixed effect model (FEM) and system GMM estimation techniques were used to conclude the study's findings. In addition, to test the robustness of the results, the authors computed the level of financial constraints using the WW Index.FindingsThe findings show that firm performance has a significant positive impact on CEO compensation in all profitability measures except Tobin's Q. Further financial constraints have a significant negative impact on CEO compensation. The interactive variables of FC with all profitability measures have a significant negative impact on CEO compensation.Originality/valueThis study examines the relationship between firm performance and CEO compensation. Furthermore, the current study expanded the analysis by incorporating the role of financial constraints in the pay–performance relationship, which has not previously been tested, particularly in the context of an emerging market.

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Section: Methodsmentioning

confidence: 99%

Do financial constraints moderate the relationship between CEO compensation and firm performance: an emerging market evidence

Farooq

Khan

Noor

2023

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“…We use Duvol and Ncskew to measure stock price crash risk according to previous studies (Chen et al, 2001;Yang et al, 2021). Table 10 shows the results of the influence of the co-shareholding network on stock price crash risk.…”

Section: Stock Price Crash Risk Perspectivementioning

confidence: 99%

“…From an economic perspective, news media are regarded as market agents, creating and disseminating information to their readers to satisfy their demands for information (Dyck et al, 2008; Houston et al, 2011). Most studies adopting this perspective find that because of the characteristics of information dissemination, news media coverage can significantly influence a firm's market performance (Liu et al, 2017; Teng & Yang, 2021). Thus, negative media coverage can severely limit shareholder value maximisation, which gives companies' shareholders economic incentives to spin media coverage.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…Large shareholders can use information advantages to distract investors' attention in the market, thus increasing market noise. Previous studies have found that multiple large shareholders in a focal company could increase the stock price crash risk (Yang et al, 2021), increasing stock volatility (Gabaix et al, 2006) and ultimately influencing firm value (Cai et al, 2016). Although these studies have analysed how large shareholders can affect a firm's economic consequences, they still ignore how large shareholders can use their information advantage to impact information transmission in the market, especially the impact of media coverage.…”

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confidence: 99%

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How do co‐shareholding networks affect negative media coverage? Evidence from China

Wang

Hou

Liu

2023

Accounting & Finance

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This paper explores the relationship between the co‐shareholding network and negative media coverage in the context of China. We find that the high degree centrality and structural holes of firm's co‐shareholding networks have negative effects on the amount and severity of negative media coverage but through differentiated mechanisms. Focal firms in high degree centrality positions can decrease negative coverage by information sharing through the network, but focal firms in the position of structural holes reduce negative coverage through information control. Our findings can complement both research on the disparate impacts of co‐shareholding networks and the media spin effect.

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“…In a cross‐sectional comparison of the three types of innovation information, innovation advantage information, as the most favourable news for firms, is the most capable one to enhance investor confidence and help firms accumulate reputational capital (Cao, Xia, & Chan, 2016). In contrast, innovation risk information, as ‘bad news’ against firms, is most likely to be the target of management concealment (Teng & Yang, 2021) and it is considered detrimental to the establishment of a firm's high reputational capital (Lee, Lu, & Wang, 2019). Compared with the above two, since innovation content information reflects the future innovation strategy and specific plan arrangement of the company, it presents the most objective information among the three categories and its role remains moderate in accumulating a firm's reputational capital.…”

Section: Research Hypothesismentioning

confidence: 99%

Innovation information disclosure and stock price crash risk‐based supervision and insurance effect path analysis

Xiao

2022

Australian Economic Papers

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Because of the long cycle of innovation, more investment, high risk and other characteristics, Chinese innovative firms tend to have a higher degree of information asymmetry, leading to frequent stock price ‘flash crashes’. This study investigates the impact of innovation information disclosure on stock price crash risk by examining the supervisory effect and insurance effect of innovation information disclosure for Growth Enterprises Market(GEM)‐listed firms in China from 2015 to 2019. We find that innovation information disclosure helps reduce firms' future stock price crash risk. The mechanism test finds that innovation information disclosure can exert both supervisory and insurance effects to reduce stock price crash risk. Specifically, after dividing innovation information disclosure into three categories: innovation advantage, content and risk disclosure, a vertical comparison reveals that the insurance effect of innovation advantage disclosure is more significant than the supervisory effect, while the opposite is true for innovation risk disclosure; a horizontal comparison reveals that the supervisory effect of innovation advantage, content and risk disclosure increases and the insurance effect decreases in order. The more types of innovation information disclosure, the more significant the effect of reducing stock price crash risk. Further analysis finds that the inhibitory effect of innovation information disclosure on stock price crash risk is stronger in firms with higher agency costs and higher innovation intensity in the industry. Our research has some insights into how to reduce the stock price crash risk of innovative companies in China.

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Media exposure on corporate social irresponsibility and firm performance

Cited by 18 publications

References 64 publications

Do financial constraints moderate the relationship between CEO compensation and firm performance: an emerging market evidence

Do financial constraints moderate the relationship between CEO compensation and firm performance: an emerging market evidence

How do co‐shareholding networks affect negative media coverage? Evidence from China

Innovation information disclosure and stock price crash risk‐based supervision and insurance effect path analysis

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