IDEAS home Printed from https://ideas.repec.org/p/ecl/stabus/3444.html

CEO Personality and Firm Policies

Author

Listed:
  • Gow, Ian D.

    (Harvard University)

  • Kaplan, Steven N.

    (University of Chicago)

  • Larcker, David F.

    (Stanford University)

  • Zakolyukina, Anastasia A.

    (University of Chicago)

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.

Suggested Citation

  • Gow, Ian D. & Kaplan, Steven N. & Larcker, David F. & Zakolyukina, Anastasia A., 2016. "CEO Personality and Firm Policies," Research Papers 3444, Stanford University, Graduate School of Business.
    • Handle: RePEc:ecl:stabus:3444
    as

    Download full text from publisher

    File URL: http://www.gsb.stanford.edu/gsb-cmis/gsb-cmis-download-auth/419466
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Yifei & Wang, Anni & Wu, Qun, 2024. "Navigate the turbulence: CEO extraversion and the cost of debt," Finance Research Letters, Elsevier, vol. 67(PB).
    2. Licht, Amir N. & Adams, Renee B., 2020. "Shareholders and Stakeholders around the World: The Role of Values, Culture, and Law in Directors' Decisions," LawFin Working Paper Series 13, Goethe University, Center for Advanced Studies on the Foundations of Law and Finance (LawFin).
    3. Kieschnick, Robert & Moussawi, Rabih, 2018. "Firm age, corporate governance, and capital structure choices," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 597-614.
    4. Bradley E. Hendricks & Mark Lang & Kenneth Merkley, 2022. "Through the eyes of the founder: CEO characteristics and firms’ regulatory filings," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 49(3-4), pages 383-422, March.
    5. Deshpande, Shreesh & Svetina, Marko & Zhu, Pengcheng, 2025. "CEO and CFO conscientiousness and working capital management during global financial crisis," Journal of Behavioral and Experimental Finance, Elsevier, vol. 45(C).
    6. Jun Xie & Wataru Nozawa & Shunsuke Managi, 2023. "The nexus of top executives’ attributes, firm strategies, and outcomes: Large firms versus SMEs," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 10(1), pages 1-15, December.
    7. Bäumer, Marcus, 2020. "What matters to investment professionals in decision making? The role of soft factors in stock selection," EIKV-Schriftenreihe zum Wissens- und Wertemanagement, European Institute for Knowledge & Value Management (EIKV), Luxembourg, volume 44, number 44, December.
    8. Michał Dzieliński & Alexander F. Wagner & Richard J. Zeckhauser, 2017. "Straight Talkers and Vague Talkers: The Effects of Managerial Style in Earnings Conference Calls," NBER Working Papers 23425, National Bureau of Economic Research, Inc.
    9. Toshihiro OKUBO & Alexander F. WAGNER & Kazuo YAMADA, 2017. "Does Foreign Ownership Explain Company Export and Innovation Decisions? Evidence from Japan," Discussion papers 17099, Research Institute of Economy, Trade and Industry (RIETI).
    10. Keloharju, Matti & Knüpfer, Samuli & Tåg, Joacim, 2020. "CEO Health," Working Paper Series 1326, Research Institute of Industrial Economics, revised 30 May 2022.
    11. Gianpaolo Parise & Kim Peijnenburg, 2017. "Understanding the determinants of financial outcomes and choices: the role of noncognitive abilities," BIS Working Papers 640, Bank for International Settlements.
    12. Zhao, Yuchen & Bi, Xiaogang & Ma, Qing-Ping, 2025. "Predicting mergers & acquisitions: A machine learning-based approach," International Review of Financial Analysis, Elsevier, vol. 99(C).
    13. 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.
    14. Ron Tidhar & Kathleen M. Eisenhardt, 2020. "Get rich or die trying… finding revenue model fit using machine learning and multiple cases," Strategic Management Journal, Wiley Blackwell, vol. 41(7), pages 1245-1273, July.
    15. Karel Hrazdil & Jiri Novak & Rafael Rogo & Christine Wiedman & Ray Zhang, 2020. "Measuring executive personality using machine‐learning algorithms: A new approach and audit fee‐based validation tests," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 47(3-4), pages 519-544, March.
    16. Theophilus Lartey & Kwabena Kesse & Albert Danso, 2020. "Ceo Extraversion And Capital Structure Decisions: The Role Of Firm Dynamics, Product Market Competition, And Financial Crisis," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 43(4), pages 847-893, December.
    17. Vijay S. Sampath & Arthur J. O’Connor & Calvester Legister, 2022. "Moral leadership and investor attention: An empirical assessment of the potus’s tweets on firms’ market returns," Review of Quantitative Finance and Accounting, Springer, vol. 58(3), pages 881-910, April.
    18. Bennouri, Moez & Chtioui, Tawhid & Nagati, Haithem & Nekhili, Mehdi, 2018. "Female board directorship and firm performance: What really matters?," Journal of Banking & Finance, Elsevier, vol. 88(C), pages 267-291.
    19. Jochen Becker & Josip Medjedovic & Christoph Merkle, 2019. "The Effect of CEO Extraversion on Analyst Forecasts: Stereotypes and Similarity Bias," The Financial Review, Eastern Finance Association, vol. 54(1), pages 133-164, February.
    20. Evangelos Mourelatos & Nicholas Giannakopoulos & Manolis Tzagarakis, 2022. "Personality traits and performance in online labour markets," Behaviour and Information Technology, Taylor & Francis Journals, vol. 41(3), pages 468-484, February.
    21. Aabo, Tom & Hansen, Malene & Krog, Sara Husted & Kynde, Katrine, 2024. "Explaining differences in CEO gender diversity across industries: Do personality traits matter?," Global Finance Journal, Elsevier, vol. 61(C).
    22. Steven N. Kaplan & Morten Sorensen, 2017. "Are CEOs Different? Characteristics of Top Managers," NBER Working Papers 23832, National Bureau of Economic Research, Inc.
    23. Du, Yao & Chan, Chia-Ying & Lin, Chih-Yung & Lu, Chien-Lin, 2023. "Charitable CEOs and employee protection," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecl:stabus:3444. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/gsstaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.