The role of the media in corporate governance: Do the media influence managers' capital allocation decisions?

• 成果类型: Article
• 署名作者: Liu, Baixiao; McConnell, John J.
• 署名单位: State University System of Florida; Florida State University; Purdue University System; Purdue University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2013.06.003
• 发表日期: 2013
• 页码: 1-17
• 关键词: media; capital allocation; acquisition; corporate governance

摘要

Using 636 large acquisition attempts that are accompanied by a negative stock price reaction at their announcement (value-reducing acquisition attempts) from 1990 to 2010, we find that, in deciding whether to abandon a value-reducing acquisition attempt, managers' sensitivity to the firm's stock price reaction at the announcement is influenced by the level and the tone of media attention to the proposed transaction. We interpret the results to imply that managers have reputational capital at risk in making corporate capital allocation decisions and that the level and tone of media attention heighten the impact of a value-reducing acquisition on the managers' reputational capital. To the extent that value-reducing acquisition attempts are more likely to be abandoned, the media can play a role in aligning managers' and shareholders' interests. (c) 2013 Elsevier B.V. All rights reserved.