Narcissistic leaders and corporate cash Holdings: Evidence in China

Penghua Qiao, Yang Long, Hung-Gay Fung and Erin Hui-Chuan Kao

The North American Journal of Economics and Finance, 2022, vol. 59, issue C

Abstract: We use a sample of Chinese firms listed on the Stock Exchange of Hong Kong over the period 2007–2018 to examine the relationship between narcissistic leadership and corporate cash holdings. We find that narcissistic leaders seek to attract public attention and promote self-image by overinvestments that reduce cash holdings. We also show that narcissistic leaders have better access to bank loans and lower loan cost, prompting them to hold less cash. The negative effect of narcissistic leaders on cash holdings is more pronounced at private firms than at SOEs. In addition, narcissistic leaders negatively affect the firm value. We contribute to the literature on leader narcissism, cash holdings, and corporate governance in emerging market contexts.

Keywords: Cash holdings; Narcissistic leaders; State ownership (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:59:y:2022:i:c:s1062940821001741

DOI: 10.1016/j.najef.2021.101567

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