Investors reaction to acquisition announcements by narcissistic CEOs in times of high environmental uncertainty
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2021-08-30
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en
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In general, CEOs with a more narcissistic personality tend to manage firms very differently compared to CEOs who are less narcissistic. This research measures the effect of an acquisition announcement, made by a narcissistic CEO on the stock market reaction, by using a novel media-based measurement technique and utilizing the outcomes of third-party ratings of video samples of 99 S&P500 CEOs. Using signaling theory as a theoretical lens, three hypotheses were formulated. It has been researched (1) if a narcissistic CEO influences the stock market reaction negatively when announcing an acquisition, (2) if environmental uncertainty has a direct effect on stock market reaction and (3) if environmental uncertainty moderates the relationship between CEO narcissism and stock market reaction. A significant result has been found for the second hypothesis. A new measurement method has also been applied in this research by implementing attention check questions combined with the NPI-16 questionnaire. However, further research and validation should be conducted to refine this method in order to implement it in future research.
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Faculteit der Managementwetenschappen