The Effect of Leaders with Narcissism and Overconfidence Characteristics on Corporate Risk-Taking

Yosephine Endang Purba (), Farah Margaretha Leon, Kristian Chandra, Febria Narulita and Caecilia Rina
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Yosephine Endang Purba: Universitas Trisakti, Management Study Program, Faculty of Economic and Business
Farah Margaretha Leon: Universitas Trisakti, Management Study Program, Faculty of Economic and Business
Kristian Chandra: Universitas Trisakti, Management Study Program, Faculty of Economic and Business
Febria Narulita: Universitas Trisakti, Management Study Program, Faculty of Economic and Business
Caecilia Rina: Universitas Trisakti, Management Study Program, Faculty of Economic and Business

A chapter in Proceedings of the International Conference on Entrepreneurship, Leadership and Business Innovation (ICELBI 2022), 2023, pp 720-730 from Springer

Abstract: Abstract The characteristics of a leader in a company significantly impact the organization's sustainability. This study aims to investigate the influence of the narcissistic character of the CEO and Board, as well as managerial overconfidence in corporate risk-taking. The data in this study were collected from 22 manufacturing companies listed on the Indonesia Stock Exchange from 2014–2020. The data in this study is secondary data, tested using the regression data panel method using E-Views 12 software. These research findings indicate a significant negative relationship between Board Narcissism and Corporate Risk Taking and a critical negative relationship between Management Overconfidence and Corporate Risk Taking. Leverage as a variable control has a significant positive relationship with Corporate Risk Taking. Research provides implications for investors and the industry to understand better the role of narcissism and the overconfidence of CEOs, boards, and company management in making rational decisions about company risk-taking. This research is expected to be a positive reference for all company stakeholders and contribute to developing literature on leader narcissism, overconfidence, and corporate risk-taking.

Keywords: Board Narcissism; CEO Narcissism; Corporate Risk-Taking; Leverage; Management Overconfidence (search for similar items in EconPapers)
Date: 2023
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DOI: 10.2991/978-94-6463-350-4_71

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