Firm Performance in the Face of Fear
Posted: 4 Dec 2014 Last revised: 19 Feb 2016
Date Written: July 3, 2014
We use facial emotion recognition software to quantify CEO mood. Anger or disgust motivates a CEO to work harder to improve his/her situation thus firm profitability improves in the subsequent quarter. Happy CEOs are less likely to work on hard or unpleasant tasks thus profitability decreases in the subsequent quarter. In the short term, 'Fear’ explains the firm's announcement period market performance. However fear is transient and performance improvement is short term.
Keywords: facial fear, emotion recognition, facial emotions, CEO fear, soft information
JEL Classification: F3, G3, D2, D7, K4, L2
Suggested Citation: Suggested Citation