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CEO neuroticism and corporate cash holdings: Evidence from CEOs’ tweets

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  • Bui, Dien Giau
  • Chou, Robin K.
  • Lin, Chih-Yung
  • Lu, Chien-Lin

Abstract

We examine the effects of CEO neuroticism on corporate policies for cash holdings. After hand collecting tweets by CEOs to measure their neuroticism, we find that firms with relatively neurotic CEOs hold more cash than other firms. This positive effect is more pronounced when the firm has a higher precautionary motive to hold cash. The cash held by firms with neurotic CEOs leads to higher firm values and lower credit risks. Overall, neurotic CEOs maintain more conservative corporate policies on holding cash, resulting in a lower cost of financial distress and an improvement in the value of firms.

Suggested Citation

  • Bui, Dien Giau & Chou, Robin K. & Lin, Chih-Yung & Lu, Chien-Lin, 2025. "CEO neuroticism and corporate cash holdings: Evidence from CEOs’ tweets," Journal of Empirical Finance, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:empfin:v:80:y:2025:i:c:s0927539824001002
    DOI: 10.1016/j.jempfin.2024.101566
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    More about this item

    Keywords

    Cash holdings; CEO personality traits; CEO neuroticism; precautionary motives; value of cash;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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