CEO Social Capital and the Value Relevance of Accounting Metrics

Equity investors value CEO social capital when pricing firm equity. When is high, the relevance of book equity declines, whereas earnings measures increases. Results are stronger for firms in high-tech industries where information asymmetries higher. Social may be deconstructed into informational and reputational effects we report that a meaningful determinant both scenarios. robust to alternative variable definitions, controls tests endogeneity. The results strongly suggest improves environment around firms, benefiting users accounting metrics.