Media uncertainty and risk-taking

Jiexiang Huang; Helen Roberts; Eric K.M. Tan

doi:10.1016/j.irfa.2023.102930

Media uncertainty and risk-taking

Jiexiang Huang^*, Helen Roberts, Eric K.M. Tan

^*Corresponding author for this work

Department of Accounting

Research output: Contribution to journal › Article › peer-review

4 Citations (Scopus)

Abstract

This study investigates the association between uncertain media tone and risk-taking measures that capture CEO risk-taking incentives, corporate investment, and financial policies. The study predicts that CEOs who attract greater uncertain media tone have more risk-taking incentives. We find a positive association between uncertain media tone and R&D expenditures and financial leverage, and a negative association between uncertain media tone and capital expenditure. Our results are robust to endogeneity concerns and further tests, and demonstrate the importance of uncertainty to executive decision-making. The study documents a potential missing link between uncertain media tone, CEO discretion, and firm risk-taking activities.

Original language	English
Article number	102930
Journal	International Review of Financial Analysis
Volume	91
DOIs	https://doi.org/10.1016/j.irfa.2023.102930
Publication status	Published - Jan 2024

Keywords

CEO risk-taking incentives
Corporate policies
Investment and financial risk
Uncertain media tone

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10.1016/j.irfa.2023.102930

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abstract = "This study investigates the association between uncertain media tone and risk-taking measures that capture CEO risk-taking incentives, corporate investment, and financial policies. The study predicts that CEOs who attract greater uncertain media tone have more risk-taking incentives. We find a positive association between uncertain media tone and R&D expenditures and financial leverage, and a negative association between uncertain media tone and capital expenditure. Our results are robust to endogeneity concerns and further tests, and demonstrate the importance of uncertainty to executive decision-making. The study documents a potential missing link between uncertain media tone, CEO discretion, and firm risk-taking activities.",

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AU - Roberts, Helen

AU - Tan, Eric K.M.

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AB - This study investigates the association between uncertain media tone and risk-taking measures that capture CEO risk-taking incentives, corporate investment, and financial policies. The study predicts that CEOs who attract greater uncertain media tone have more risk-taking incentives. We find a positive association between uncertain media tone and R&D expenditures and financial leverage, and a negative association between uncertain media tone and capital expenditure. Our results are robust to endogeneity concerns and further tests, and demonstrate the importance of uncertainty to executive decision-making. The study documents a potential missing link between uncertain media tone, CEO discretion, and firm risk-taking activities.

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KW - Corporate policies

KW - Investment and financial risk

KW - Uncertain media tone

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JO - International Review of Financial Analysis

JF - International Review of Financial Analysis

M1 - 102930

ER -

Media uncertainty and risk-taking

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Keywords

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