Tournament-based incentives and media sentiment

Jiayi Zheng, Hasibul Chowdhury, Md Safayat Hossain, Kartick Gupta

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

We find that promotion-based tournament incentives of executives are positively associated with firms’ media sentiment. This effect is more pronounced among firms with greater need for media favourability, captured by higher information opacity, lower analyst coverage, lower industry homogeneity, lower investment sentiment and lower managerial ability. Furthermore, we identify better financial performance and higher corporate branding as two channels through which tournament incentives can enhance a firm’s positive media sentiment. Our results are also robust to two quasi-natural experiments affecting promotion-based tournaments – (a) an exogenous CEO turnover due to health issues or sudden CEO death, and (b) the implementation of Say-on-Pay (SOP) law. Overall, our findings indicate that tournament-based incentives encourage a firm’s executives to showcase their skills to broader stakeholders, which consequently increases a firm’s media image.
Original languageEnglish
Article number100353
Pages (from-to)1-21
Number of pages21
JournalJournal of Contemporary Accounting and Economics
Volume19
Issue number2
DOIs
Publication statusPublished - Aug 2023
Externally publishedYes

Keywords

  • Tournament-based incentives
  • Media sentiment
  • Promotion-based tournament
  • Corporate branding

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