Media Attention Given to Six CEO News Types and Its Influence on
Consumer Evaluations Prachi Gala and Samuel Staebler
Coles Working Paper Series, SPRING24-01, March 2024
OVERVIEW
This study investigates how CEO-related events covered in news media affect consumer evaluations. The conceptual model proposes six CEO-related news categories and details their impact on consumer evaluations. In addition, this study also investigates to what degree these consumer responses determine stock prices of firms. The authors analyze a rich sample of 725 CEO-related events of 125 firms covered in leading U.S. news outlets from 2009 to 2019. Through a quasi-experiment and an event study, this study finds that stories about CEO scandals detrimentally affect consumers which can be translated to an immediate loss of more than US$500 million on stock markets. In addition, this study also shows that news stories about CEO altruism or CEO political ideologies have a positive impact on consumer evaluations. Overall, the authors explain the variation of effects investigating important moderators based on signaling and screening theory.
58 | Working Papers
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