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

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  • 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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    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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