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.
•Examines the link between uncertain media tone and risk-taking.•CEOs who attract greater uncertain media tone have more risk-taking incentives.•Greater uncertain media tone is associated with higher R&D and firm leverage.•Uncertain media tone reduces firm capital expenditure.
- 9926495315901891
- Media uncertainty and risk-taking
- Jiexiang HuangHelen RobertsEric K.M. Tan
- International review of financial analysis, Vol.91, 102930
- Accountancy and Finance
- Elsevier
- 01/2024
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- English
- Journal article