The Effect of Positive Performance Feedback on Publicly Disclosed Corporate Misconduct: The Moderating Roles of CEO Media Reputation and Financial Health

This study examines the effect of positive performance feedback on publicly disclosed corporate misconduct among manufacturing firms listed on the KOSPI from 2013 to 2022, focusing on the moderating roles of CEO social reputation and financial health. Drawing upon the Behavioral Theory of the Firm (BTOF) and Prospect Theory, I hypothesize that performance exceeding aspiration levels increases the likelihood of disclosed misconduct, and that this relationship is mitigated when the CEO holds a strong media reputation and when the firm maintains robust financial health. Using panel data and a fixed-effects panel logit model, the analysis demonstrates that positive performance feedback significantly increases the probability of misconduct disclosure, while a CEO’s positive media reputation and strong financial health attenuate this effect. These findings suggest that CEO media reputation and financial stability serve as critical governance mechanisms that can curb corporate misconduct.