Love thy neighbor: CEO extraversion and corporate acquisitions

Tom Aabo, Jakob Berggreen Hansen and Sebastian Malling Petersen

Finance Research Letters, 2023, vol. 55, issue PA

Abstract: We investigate the relationship between CEO extraversion and the geographical dispersion of acquisitions within the U.S. The dispersion decision is important and has implications for employment, investments, and valuation. We show that extraverted CEOs prefer local deals and that the stock market favors local acquisitions made by extraverted CEOs. Our results support the notion that the extended and information-rich, local networks of extraverted CEOs as well as the agentic qualities of these CEOs facilitate the acquisition of local target firms. Our results are important in illuminating the channels through which extraverted CEOs make acquisitions and create value.

Keywords: Behavioral corporate finance; CEO extraversion; Mergers & acquisitions; Geographical dispersion (search for similar items in EconPapers)
JEL-codes: G34 G40 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:55:y:2023:i:pa:s1544612323002805

DOI: 10.1016/j.frl.2023.103908

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