Moderating the connections: media coverage and firm market value

IF 5.5 Q1 BUSINESS

Corporate Governance-The International Journal of Business in Society Pub Date : 2022-10-10 DOI:10.1108/cg-02-2022-0068

M. Gama, Jeferson Lana, Giovana Bueno, Rosilene Marcon, Rodrigo Bandeira-de-Mello

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引用次数: 0

Abstract

Purpose The purpose of this paper is to explore how a politically connected firm moderates the relationship between media coverage and market value. More specifically, the authors are interested in the interplay of an external corporate governance (CG) mechanism with an internal one. By interacting different mechanisms, this paper advances the empirical setting of application and functions of the corporate governance. Design/methodology/approach This paper tests the hypotheses presented using panel data with a fixed-effect model, by assembling and exploiting a unique, hand-collected set of data on media coverage consisting of over 164,000 media reports and a politically connected board of directors comprising over 12,000 CVs tracked from 2010 to 2014. Data is originally from Brazil, a country where political connections are highly used by firms and that has been a place of much research on corporate political activity. Findings The results of this paper suggest that a politically connected board of directors can mitigate the negative effects of media coverage on market value. Overall, the results imply that the validity of a CG mechanism might be affected by other mechanisms. Research limitations/implications The findings of this paper imply the need for research focusing on the mutual effects of different CG mechanisms. While CG is understood as a set of mechanisms, new research could focus on the interplay of these mechanisms. Practical implications The findings suggest that the presence of former politicians and government officers on the board dissipates bad news reported by the media and boosts market value when media is positive. To maximize investment returns, investors should analyze firms' political human capital. Originality/value To the best of the authors’ knowledge, this paper is the first to develop hypotheses on the moderation effects of a politically connected board on the relation between media coverage and market value. This is relevant because this brings insights on how firms could jointly manage these mechanisms.

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调节联系:媒体报道和公司市场价值

本文的目的是探讨政治关联企业如何调节媒体报道与市场价值之间的关系。更具体地说，作者对外部公司治理(CG)机制与内部机制的相互作用感兴趣。通过不同机制的相互作用，本文提出了公司治理应用与功能的实证设置。设计/方法/方法本文使用固定效应模型的面板数据来检验提出的假设，通过组装和利用一套独特的、手工收集的媒体报道数据，包括超过16.4万份媒体报道和一个有政治关系的董事会，包括从2010年到2014年追踪的超过1.2万份简历。数据最初来自巴西，在这个国家，企业高度利用政治关系，对企业政治活动进行了大量研究。研究结果表明，政治关联的董事会可以缓解媒体报道对市场价值的负面影响。总体而言，研究结果表明，一个CG机制的有效性可能会受到其他机制的影响。研究局限/启示本文的研究结果表明，需要对不同CG机制的相互作用进行研究。虽然CG被理解为一套机制，但新的研究可以集中在这些机制的相互作用上。实际意义研究结果表明，前政治家和政府官员在董事会的存在消除了媒体报道的坏消息，并在媒体正面报道时提高了市场价值。为了使投资收益最大化，投资者应该分析企业的政治人力资本。原创性/价值据作者所知，本文首次提出了政治关联董事会对媒体报道与市场价值之间关系的调节作用的假设。这是相关的，因为它带来了企业如何共同管理这些机制的见解。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Corporate Governance-The International Journal of Business in Society BUSINESS-

CiteScore

11.20

自引率

33.90%

发文量

期刊介绍： Providing a consistent source of in-depth information, analysis and advice considering corporate governance on an international scale, Corporate Governance: The International Journal of Business in Society focuses on knowledge development, practice and performance standards for scholars and Boards of Directors/ Governors of companies throughout the world. The journal publishes a diverse range of substantive theoretical and methodological debates as well as practical developments in the field of corporate governance worldwide. The journal particularly encourages attention to the impact of changes of business/corporate governance forms and practices on people, and the sustainability of different governance models. Articles that highlight models and structures that advance the interests, dignity and well being of all stakeholders, in a sustainable manner, are particularly welcome. The journal covers a broad spectrum of governance-related themes including: -Effective boardroom performance -Control and regulation -Executive leadership -The role and contribution of external (non-executive) directors -The growing importance of governance in the wake of ever-greater corporate scandals -Redefinitions and reassessments of corporate governance models -The role of business in society -The changing nature of the relationship and responsibilities of the firm towards various stakeholders -The incentives required to encourage more socially- and environmentally-responsible corporate action -The role and impact of local and international regulatory agencies and regimes on corporate behaviour.