Does media reputation affect properties of accounts payable?

Bogaerd, Machteld Van den; Aerts, Walter

doi:10.1016/j.emj.2014.05.002

Cited by 32 publications

(9 citation statements)

References 72 publications

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“…Greenwood, Li, Prakash, and Deephouse (2005) find the number of positive articles is positively associated with the profitability of professional service firms. As an example for a more recent study, Van den Bogaerd and Aerts (2015) find that a higher proportion of favorable articles are associated with a higher level of trade accounts payable, suggesting that reputation facilitates the use of trade credit.…”

Section: Media As An Evaluatormentioning

confidence: 95%

The Effects of Financial Crisis on the Organizational Reputation of Banks: An Empirical Analysis of Newspaper Articles

Englert¹,

Koch

Wüstemann

2018

Business & Society

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The recent financial crisis has triggered an intense debate about the role of banks in society, presumably changing the criteria used in the evaluation of organizations. Against this backdrop, we investigate the changing role of banks' organizational features in shaping different dimensions of banks' organizational reputation. Using the media as an important evaluator, we measure the reputational dimension of visibility based on the frequency of newspaper articles and the reputational dimension of favorability based on the sentiment of newspaper articles. Drawing on social judgment research for developing our hypotheses, we expect that organizational features such as financial performance and familiarity become more important determinants of organizational reputation in times of crisis. Our results support this expectation, suggesting stronger effects of these organizational features on the visibility and favorability of banks during a crisis. These findings provide novel empirical evidence on how the importance of drivers of organizational reputation changes in times of crisis and highlight areas for managerial attention.

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Section: Media As An Evaluatormentioning

confidence: 95%

The Effects of Financial Crisis on the Organizational Reputation of Banks: An Empirical Analysis of Newspaper Articles

Englert¹,

Koch

Wüstemann

2018

Business & Society

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“…The reputation of organizations can offer a significant competitive advantage for them (Gatzert, 2015), as it facilitates raising capital (Fombrun et al, 2000), assists in stakeholder negotiations, alliance building, and contracts (Fombrun and van Riel, 2004;Rhee and Valdez, 2009;Van Den Bogaerd and Aerts, 2015;Eckert, 2017) and is considered a strategic intangible asset (Hall, 1992). These positive benefits of good corporate reputation are linked to the fact that external stakeholders and observers form opinions, beliefs and impressions of an organization (Rindova et al, 2010), that can ultimately affect stakeholder decision making and improve competitiveness (Fombrun and Shanley, 1990;Soana, 2016).…”

Section: Reputational Risk In Financial Institutions: Previous Researmentioning

confidence: 99%

Operational risk and reputation in financial institutions: Does media tone make a difference?

Barakat

Ashby

Fenn

et al. 2019

Journal of Banking & Finance

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Operational risk announcements are unexpected adverse media news that potentially harm the reputation of financial institutions. This paper examines the equity-based and debt-based reputational effects of financial sentiment tones in operational risk announcements and shows how such reputational effects are moderated by alternative sources of public information. Our analysis reveals that the net negative tone and litigious tone have adverse reputational effects, and the uncertainty tone mitigates the adverse reputational impact. Additionally, alternative, simultaneous sources of information neutralize the reputational effects of textual tones. First, third-party information about the event (i.e. regulatory announcements and final settlements) dissolves the favorable (adverse) reputational impact of the uncertainty tone (litigious tone). Second, loss amount disclosure and firm recognition substitute the reputational effects of the net negative tone and uncertainty tone only in Anglo-Saxon countries and market-based economies. Overall, our findings indicate that the reputational effects of the media materialize most when there is lack of certain, quantifiable and regulated public information about the operational risk event.

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“…This theory argues that inefficiencies in financial markets lead to credit rationing (Van den Bogaerd and Aerts, 2015) which prevents firms from accessing the needed funds to finance their operations (Emery, 1984;Petersen and Rajan, 1997); that is, suppliers' credit acts as a complement to bank credit (Kohler et al, 2000;Van den Bogaerd and Aerts, 2015). The theory explains that firms rely on trade payables as an important source of short-term finance (Cook, 1999) because it shields them from inefficiencies in the capital markets (Ferrando and Mulier, 2013).…”

Section: Trade Payables and Firm Performance: Theoretical Frameworkmentioning

confidence: 99%

Product differentiation, market dynamics and the value relevance of trade payables: Evidence from UK listed firms

Afrifa

Gyapong

Monem

2018

Journal of Contemporary Accounting & Economics

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This paper provides a comprehensive evidence on how product and market dynamics affect the value relevance of trade payables. Using a sample of 2,559 UK listed firms over the period 2005-2014, we find a positive relationship between trade payables and firm performance. Our evidence suggests that trade payables increase (decrease) performance in firms with differentiated products and demand uncertainty (larger market share). We demonstrate that the relative value relevance of bank credit versus suppliers' credit is dependent on the nature of the product, the level of sales volatility, and market share. We use an innovative approach to assess the robustness of our results to omitted variable bias.

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Does media reputation affect properties of accounts payable?

Cited by 32 publications

References 72 publications

The Effects of Financial Crisis on the Organizational Reputation of Banks: An Empirical Analysis of Newspaper Articles

The Effects of Financial Crisis on the Organizational Reputation of Banks: An Empirical Analysis of Newspaper Articles

Operational risk and reputation in financial institutions: Does media tone make a difference?

Product differentiation, market dynamics and the value relevance of trade payables: Evidence from UK listed firms

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