Aug

24

This came across my twitter feed.

CEO PERSONALITY AND FIRM POLICIES
, Gow et al.

Abstract:

Based on two samples of high quality personality data for chief executive officers (CEOs), we use linguistic features extracted from conferences calls and statistical learning techniques to develop a measure of CEO personality in terms of the Big Five traits: agreeableness, conscientiousness, extraversion, neuroticism, and openness to experience. These personality measures have strong out-of-sample predictive performance and are stable over time. Our measures of the Big Five personality traits are associated with financing choices, investment choices and firm operating performance.

and conclusion:

Finally, we examine associations between CEO personality traits with observed investment and financing choices and firm performance. We find that openness is positively associated with R&D intensity and negatively with net leverage; whereas conscientiousness is negatively associated with growth. In performance tests, extraversion is negatively associated with both contemporaneous and future return on assets and cash flow. However, our results are descriptive and further work is necessary to understand the nature of the causal relations, if any, between personality and firm policies and performance.


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