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(Re)Placing Personalis: A Study of Placement Reform and Self-Construction in Mission-Driven Contexts
No full textThe real Kamala Harris: What her California years reveal. CalMatters talks with SMC\u27s Corey Cook
No full textAn Examination of the Effect of Management Consultant Engagements on Public Sentiment
Get PDFThe management consulting industry is critical in shaping corporate strategy in the U.S. However, academic research on the market signals generated by a firm\u27s use of such consultants is scant. This paper investigates the relationship between public sentiment and the utilization of management or strategy consultants. It leverages agency and signaling theories to decode the information conveyed to the market through such engagements/ The research contrasts a fresh dataset comprising 190 publicly traded U.S. firms that reveal their consultant usage with an extensive control group, leveraging three public data sources, including Refinitiv\u27s MarketPsych Analytics database, spanning the years 2000 to 2022. I discover that firms hiring consultants exhibit enhanced sentiment and trust, reduced financial volatility, and increased net analyst upgrade recommendations. These findings suggest firms using consultants may signal to the market that these firms are implementing stabilizing strategies, resulting in expectations for more consistent financial performance and thus positive market sentiment and trust. The research also suggests analysts interpret consultants as a favorable signal for the firm\u27s future, influencing public sentiment about the firm. These findings invite further investigation into how analyst ratings act as an intermediary of information mediating the signal that hiring a consultant may provide the public
