Seminar - Media Focus and Executive Turnover: Consequences for Female Leadership

Media Focus and Executive Turnover: Consequences for Female Leadership

Abstract

I study whether the tendency of news media to focus on negative events affects executive turnover in publicly listed firms in the U.S., and to what extent negative media focus explains the higher incidence of turnover for women in top executive roles. Linking CEO positions to firm-level news, I provide evidence that the negative focus is higher when a company is led by a woman or an outsider CEO, and that negative news are highly predictive of executive turnover. From the standpoint of a rational board, negative media focus may decrease the expected benefit of retaining a CEO, thus increasing the chances of replacement. Counterfactual simulations from a model of executive turnover with event-dependent media focus show that the higher negative focus explains around 15% of the differential turnover rate in female-led firms, even when women are as effective at managing the firm as their male counterparts.

Bio

Valeria Ferraro is a PhD candidate in Economics at Boston College. Her research interests include labor economics, personnel economics, and corporate governance. 
Her research mostly concerned with understanding the absence of female representation in top executive roles.