The Impact of CEO Narcissism on Corporate Financialization

Linan Wang, Rixin Li () and Ruotong Zhao
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Linan Wang: School of Accounting, Jilin University of Finance and Economics, Changchun 130117, China
Rixin Li: School of Accounting, Jilin University of Finance and Economics, Changchun 130117, China
Ruotong Zhao: School of Accounting, Jilin University of Finance and Economics, Changchun 130117, China

IJFS, 2025, vol. 13, issue 1, 1-18

Abstract: This paper empirically examines the impact of CEO narcissism on corporate financialization using Shanghai and Shenzhen A-share listed companies from 2009–2022. The results find that CEO narcissism leads to corporate financialization, and the promotion is more significant in lower cash flow, smaller company size, and non-Big Four audited firms. The impact mechanism test finds that CEO narcissism leads to inefficient investment behaviors, increases agency costs, and thus, exacerbates corporate financialization. By exploring the relationship between CEO narcissism and corporate financialization in depth, this paper provides new perspectives and ideas for research in related fields. This study conducts an in-depth analysis of the underlying mechanisms through which CEO narcissism influences corporate financialization. It highlights that inefficient investment behavior and increased agency costs serve as key transmission channels, providing new theoretical support for understanding the complex drivers of corporate financialization. Therefore, this research not only expands the scope of studies on the relationship between CEO characteristics and corporate financial decision making but also offers new perspectives for explaining the phenomenon of corporate financialization and formulating governance strategies.

Keywords: CEO narcissism; corporate financialization; inefficient investment; agency costs (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2025
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