Anchored in the role of a social arbiter, the purpose of this study is to examine whether and how media coverage has an impact on CEO overconfidence and further explore how media ownership and Confucianism affect the relationship in the Chinese context.
Using a sample of 1,492 Chinese listed companies from 2010 to 2015, the study adopts random effects models to empirically analyze the effect of media coverage on CEO overconfidence and the roles of media ownership and Confucianism.
The paper finds that media coverage is significantly and positively associated with CEO overconfidence, and the positive relationship between media coverage and CEO overconfidence becomes stronger for state-controlled media. What is more, the influence of media coverage on CEO overconfidence is attenuated for those firms located in stronger Confucianism atmosphere. A further analysis reveals that different tenors of media coverage yield asymmetric effects.
The paper provides a new and solid support for the argument that media praise stimulates CEO overconfidence and increases the knowledge about under what conditions CEO overconfidence varies, broadly speaking which fosters the development of upper echelons theory (UET). Meanwhile, the results extend the literature on media effect and information processing. The findings are also beneficial to improve corporate decisions and government regulation on Chinese media systems.
The authors express their gratitude for financial support provided by the China Postdoctoral Science Foundation Funded Project (Approval Number: 2017M623135) and Startup Foundation for Doctors offered by the Hubei University of Technology (Approval Number: BSQD2020078).
Ji, Y., Zhou, E. and Guo, W. (2021), "Can the media breed CEO overconfidence? A sociocognitive perspective in the Chinese context", Cross Cultural & Strategic Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/CCSM-04-2020-0093
Emerald Publishing Limited
Copyright © 2021, Emerald Publishing Limited