A tale of two assets: The effects of firm reputation and celebrity on earnings surprises and Investors' reactions

Michael Pfarrer, Timothy Pollock, Violina Rindova

Research output: Contribution to journalArticle

291 Scopus citations

Abstract

The effects of intangible assets on organizational outcomes remain poorly understood. We compare the effects of two intangible assets-firm reputation and celebrity-on (1) the likelihood that a firm announces a positive or negative earnings surprise, and (2) investors' reactions to these surprises. We find that firms that have accumulated high levels of reputation ("high- reputation" firms) are less likely, and firms that have achieved celebrity (celebrity firms) more likely to announce positive surprises than firms without these assets. Both high-reputation and celebrity firms experience greater market rewards for positive surprises and smaller market penalties for negative surprises than other firms.

Original languageEnglish (US)
Pages (from-to)1131-1152
Number of pages22
JournalAcademy of Management Journal
Volume53
Issue number5
DOIs
StatePublished - Oct 1 2010

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Business, Management and Accounting(all)
  • Strategy and Management
  • Management of Technology and Innovation

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