CEO Narcissism and Credit Ratings

Zehan Hou (), Richard Fairchild () and Pietro Perotti ()
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Zehan Hou: University of Bath
Richard Fairchild: University of Bath
Pietro Perotti: University of Bath

Journal of Business Ethics, 2025, vol. 197, issue 1, No 4, 39-72

Abstract: Abstract Prior research has investigated how narcissistic executives affect firm policies and outcomes and how these executives influence colleagues and followers. However, almost no research exists concerning the impact of narcissistic executives on external agents. We examine the case of credit ratings—where analysts are required to assess management competence and where undue management influence is a concern—to determine whether narcissistic CEOs exert an effect on their firm’s rating. Using the size of the CEO’s personal signature to measure narcissism, we find that CEO narcissism is associated with worse credit ratings. This effect is attenuated when firms face greater financial constraints, higher industry competition, and more concentrated institutional ownership. Our study contributes to the growing body of literature on CEO narcissism and suggests that these manipulative individuals are unable to exert an obvious upward influence on credit rating agencies.

Keywords: Narcissism; CEO; Credit ratings (search for similar items in EconPapers)
JEL-codes: G30 G32 G41 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10551-024-05691-2

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