posted 2009-10-20T13:32:20Z
a recent paper by gurun demonstrates the effect that media experts on corporate boards have on companies securities performance. Abstract: Corporate board members with mass media experience influence the firm’s press coverage. Compared with control firms, firms with a media expert on the board have their good news receive more media coverage and have their bad news receive less media coverage. Media coverage increases by more than 20% after hiring media experts. I show evidence that these firms suffer from an illiquidity discount of 1.2% to 3.0% per year after they hire a media expert, consistent with the argument that uncertainty about the lack/abundance of information is simply uninformative for valuation purposes.