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News sentiment and CEO retirement: The impact on firm performance and risk

Author

Listed:
  • Gao, Ziqing
  • Hua, Min
  • Liu, Heng
  • Yan, Chao

Abstract

A growing number of empirical studies on news sentiment offer important insights into corporate behavior. Based on signaling and information content theory, we examine whether news articles are an information source that can reveal or predict firm performance. Furthermore, previous studies suggest that CEOs’ heterogeneous individual-specific characteristics have a significant impact on firms’ performance and decisions. Here, we expand the literature by exploring the impact of near-retirement CEO characteristics on firm performance and risk outcomes. Our paper indicates that near-retirement CEOs are associated with better firm performance but less risk-taking behavior, which is consistent with the view of myopic loss aversion and “legacy conservation” concerns.

Suggested Citation

  • Gao, Ziqing & Hua, Min & Liu, Heng & Yan, Chao, 2023. "News sentiment and CEO retirement: The impact on firm performance and risk," Research in International Business and Finance, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:riibaf:v:66:y:2023:i:c:s0275531923001575
    DOI: 10.1016/j.ribaf.2023.102031
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    References listed on IDEAS

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    3. Laura Xiaolei Liu & Ann E. Sherman & Yong Zhang, 2014. "The Long-Run Role of the Media: Evidence from Initial Public Offerings," Management Science, INFORMS, vol. 60(8), pages 1945-1964, August.
    4. Sheng, Jie & Lan, Hao, 2019. "Business failure and mass media: An analysis of media exposure in the context of delisting event," Journal of Business Research, Elsevier, vol. 97(C), pages 316-323.
    5. Marianne Bertrand & Antoinette Schoar, 2003. "Managing with Style: The Effect of Managers on Firm Policies," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1169-1208.
    6. Camelia M. Kuhnen & Alexandra Niessen, 2012. "Public Opinion and Executive Compensation," Management Science, INFORMS, vol. 58(7), pages 1249-1272, July.
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    Cited by:

    1. Ji, Xinru & Chen, Xiaoxu & Ao, Zhiming, 2024. "ESG rating, board faultlines, and corporate performance," Research in International Business and Finance, Elsevier, vol. 72(PB).
    2. Cabreros, David & de la Fuente, Gabriel & Velasco, Pilar, 2024. "From dawn to dusk: The relationship between CEO career horizon and ESG engagement," International Review of Financial Analysis, Elsevier, vol. 93(C).

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    More about this item

    Keywords

    News sentiment; CEO retirement; Firm performance; Risk-taking;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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