Firm Performance in the Face of Fear

Posted: 4 Dec 2014 Last revised: 19 Feb 2016

See all articles by Ali Akansu

Ali Akansu

New Jersey Institute of Technology

Jim Cicon

University of Central Missouri

Steven Ferris

University of Missouri at Columbia - Robert J. Trulaske, Sr. College of Business

Yanjia Sun

New Jersey Institute of Technology

Date Written: July 3, 2014

Abstract

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

Akansu, Ali and Cicon, James and Ferris, Steven and Sun, Yanjia, Firm Performance in the Face of Fear (July 3, 2014). Available at SSRN: https://ssrn.com/abstract=2533615 or http://dx.doi.org/10.2139/ssrn.2533615

Ali Akansu

New Jersey Institute of Technology ( email )

University Heights
Newark, NJ 07102
United States

James Cicon (Contact Author)

University of Central Missouri ( email )

Warrensburg, MO 64093-5070
United States

Steven Ferris

University of Missouri at Columbia - Robert J. Trulaske, Sr. College of Business ( email )

331 Cornell Hall
Columbia, MO 65211
United States

Yanjia Sun

New Jersey Institute of Technology ( email )

University Heights
Newark, NJ 07102
United States

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