Hear Me Write: Does CEO Narcissism Affect Disclosure?

Gilberto Marquez-Illescas (), Allan A. Zebedee () and Linying Zhou ()
Additional contact information
Gilberto Marquez-Illescas: University of Rhode Island
Allan A. Zebedee: Clarkson University
Linying Zhou: California State University – San Marcos

Journal of Business Ethics, 2019, vol. 159, issue 2, No 7, 417 pages

Abstract: Abstract Through earnings announcements, conference calls, and other press releases, corporate executives have an opportunity to frame the narrative of financial disclosures. Numerous studies have shown that textual tone significantly influences stock returns, suggesting that through word choice, upper management may impact market reaction. In this study, we examine the influence of CEO personality traits on corporate disclosures by analyzing the tone of earnings announcements for a sample of Fortune 500 CEOs over nearly two decades. Our hypotheses are twofold: (1) that qualitative disclosures in firms with narcissistic leaders will be biased upward and (2) the bias will moderate as CEOs becomes older. Our empirical results support these hypotheses and suggest that more narcissistic CEOs tend to reinforce their grandiose self-image by issuing more positive earnings announcements but this desire wanes with CEO age. We also find that the stock market response to the tone of the earnings announcement is less pronounced for more narcissistic CEOs, suggesting the market takes into account the bias in narcissistic CEO announcements.

Keywords: CEO; CEO age; Earnings announcements; Narcissism; Textual analysis (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (32)

Downloads: (external link)
http://link.springer.com/10.1007/s10551-018-3796-3 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jbuset:v:159:y:2019:i:2:d:10.1007_s10551-018-3796-3

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10551/PS2

DOI: 10.1007/s10551-018-3796-3

Access Statistics for this article

Journal of Business Ethics is currently edited by Michelle Greenwood and R. Edward Freeman

More articles in Journal of Business Ethics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().