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.
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