Star CEOs and investment efficiency: Evidence from China

This study investigates whether star chief executive officers (CEOs) make more efficient investment decisions after winning a prestigious media award. Using data from Chinese A-share listed firms, we find that CEO awards significantly reduce the probability of corporate overinvestment and mitigate the magnitude of investment inefficiency; this effect is more pronounced for CEOs with high monetary compensation and in firms with weak internal governance and loose external monitoring. Additional evidence shows that star CEOs attract more media coverage than matched CEOs after winning awards, and CEO awards improve investment efficiency by reducing information asymmetry and enhancing reputation incentives. Collectively, our findings suggest that media-granted CEO awards encourage winning CEOs to boost their investment efficiency by reducing overinvestment.