Submitted by K. Ndrepepaj on Thu, 28/05/2015 - 14:05
Is More News Good News? Media Coverage of CEOs, Firm Value, and Rent Extraction
More media coverage of a CEO is a “channel of investor recognition” that also helps the chief executive extract higher compensation, says the study published in the Quarterly Journal of Finance.
“The study shows that, in the long term, if a firm’s CEO attracts more media coverage the firm will do better in terms of valuation,” says Bang Dang Nguyen, University Lecturer in Finance and Director of the MPhil in Finance Programme at Cambridge Judge. “We live in a world of incomplete information, and the study shows that additional coverage of a company’s CEO helps fill that information gap for investors, and this contributes to additional valuation.”