Top management team prestige and organizational legitimacy: An examination of investor perceptions

In this study we use survey data to examine the influence of two intangible resources, top management team (TMT) prestige and organizational legitimacy, on investor perceptions of a firm's future financial performance and future financial performance risk. Results show that investors' general perceptions of TMT prestige and organizational legitimacy are associated with their perceptions of future financial performance. We also find that organizational legitimacy partially mediates the relationship between TMT prestige and firm financial performance. We find no such effects when examining investor perceptions of future financial performance risk.