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Firm Performance in the Face of Fear: How CEO Moods Affect Firm Performance

Author

Listed:
  • Ali Akansu
  • James Cicon
  • Stephen P. Ferris
  • Yanjia Sun

Abstract

The authors use facial emotion recognition software to quantify CEO mood. Anger or disgust motivates a CEO to work harder to improve his or her situation; thus firm profitability improves in the subsequent quarter. Happy CEOs are less likely to work on hard or unpleasant tasks; thus profitability decreases in the subsequent quarter. In the short term, fear explains the firm's announcement period market performance. However, fear is transient and performance improvement is short term.

Suggested Citation

  • Ali Akansu & James Cicon & Stephen P. Ferris & Yanjia Sun, 2017. "Firm Performance in the Face of Fear: How CEO Moods Affect Firm Performance," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 18(4), pages 373-389, October.
    • Handle: RePEc:taf:hbhfxx:v:18:y:2017:i:4:p:373-389
    DOI: 10.1080/15427560.2017.1338704
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    Cited by:

    1. Hoang, Daniel & Wiegratz, Kevin, 2022. "Machine learning methods in finance: Recent applications and prospects," Working Paper Series in Economics 158, Karlsruhe Institute of Technology (KIT), Department of Economics and Management.
    2. Camarero Garcia, Sebastian & Neugebauer, Frederik & Russnak, Jan & Zimmermann, Lilli, 2023. "Effects of the ECB's communication on government bond spreads," Discussion Papers 21/2023, Deutsche Bundesbank.
    3. Mestiri, Sami, 2023. "How to use machine learning in finance," MPRA Paper 120045, University Library of Munich, Germany.
    4. Rilwan Sakariyahu & Mohamed Sherif & Audrey Paterson & Eleni Chatzivgeri, 2021. "Sentiment‐Apt investors and UK sector returns," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 3321-3351, July.
    5. Mestiri, Sami, 2024. "Financial applications of machine learning using R software," MPRA Paper 119998, University Library of Munich, Germany.

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