Remain in the spotlight or retreat into the shadows? The relationship between CEO narcissism, impression offsetting and the stock market reaction to an acquisition announcement
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2022-06-28
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en
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Abstract
Drawing on upper echelon theory, impression management literature and signalling theory, this study examines the relationship between CEO narcissism, impression offsetting and the stock market reaction to an acquisition announcement. Impression offsetting is a technique that is used by companies when they expect that an event, in this thesis an acquisition, will negatively influence the perceptions of stakeholders. This thesis proposes a moderated mediation model as basis for the hypotheses. It is hypothesized that CEO narcissism is negatively related to impression offsetting and in turn that impression offsetting is positively related to the stock market reaction to an acquisition announcement. Thereby, impression offsetting mediates the expected negative relationship between CEO narcissism and the stock market reaction. Lastly, CEO power is proposed as a moderator of the relationship between CEO narcissism and impression offsetting. A quantitative study was conducted to test the hypotheses, the sample consisting of S&P 500 companies that acquired a public target in the years 2010-2021. The hypothesized relationships between CEO narcissism and impression offsetting and impression offsetting and the stock market reaction were not supported by the results. Partial support was found for the negative relationship between CEO narcissism and the stock market reaction.
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Faculteit der Managementwetenschappen