Narcissism refers to persistent feelings of grandiosity, a need for admiration, and a lack of empathy (American Psychiatric Association 2013). The literature has found narcissism to be associated with individuals making decisions for a firm that fulfill their egos rather than maximize firm value. The literature in psychology, however, suggests that when firms face financial distress, narcissism could be a desirable trait in an individual, enabling the CEO to take the necessary risks and make the necessary decisions for the firm to recover. I study the context under which a firm may benefit from a narcissistic CEO. In this study, I use two measures from prior literature (CEO photo prominence in the annual report and a CEO’s use of first-person personal pronouns) to form a combination measure to investigate whether firms in financial distress are more likely to appoint a CEO with more narcissistic traits. I find some evidence to support this hypothesis. I also examine whether the association between narcissism and future firm performance is affected by the economic conditions of a firm and the visibility of the firm. I find results consistent with firm financial distress increasing a narcissistic CEO’s effect on firm performance in low-visibility firms.
| Identifer | oai:union.ndltd.org:uoregon.edu/oai:scholarsbank.uoregon.edu:1794/22658 |
| Date | 06 September 2017 |
| Creators | Perez, Rebeca |
| Contributors | Matsunaga, Steven |
| Publisher | University of Oregon |
| Source Sets | University of Oregon |
| Language | en_US |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Rights | All Rights Reserved. |
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