CEO Personality and Firm Policies

Gow, Ian D.; Kaplan, Steven N.; Larcker, David F.; Zakolyukina, Anastasia A.

doi:10.2139/ssrn.2805635

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CEO Personality and Firm Policies

6th Miami Behavioral Finance Conference

Stanford University Graduate School of Business Research Paper No. 16-34

Chicago Booth Research Paper No. 16-13

Fama-Miller Working Paper

Rock Center for Corporate Governance at Stanford University Working Paper No. 220

62 Pages Posted: 8 Jul 2016 Last revised: 10 Aug 2016

See all articles by Ian D. Gow

Ian D. Gow

University of Melbourne - Department of Accounting

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); University of Chicago - Polsky Center for Entrepreneurship

David F. Larcker

Stanford Graduate School of Business; Stanford University - Hoover Institution; European Corporate Governance Institute (ECGI)

Anastasia A. Zakolyukina

University of Chicago - Booth School of Business

There are 2 versions of this paper

Date Written: July 6, 2016

Abstract

Based on two samples of high quality personality data for chief executive officers (CEOs), we use linguistic features extracted from conferences calls and statistical learning techniques to develop a measure of CEO personality in terms of the Big Five traits: agreeableness, conscientiousness, extraversion, neuroticism, and openness to experience. These personality measures have strong out-of-sample predictive performance and are stable over time. Our measures of the Big Five personality traits are associated with financing choices, investment choices and firm operating performance.

Keywords: CEO Personality, leadership traits, personality measures, Big Five personality, CEO investment choices, CEO financing choices, firm operating performance

JEL Classification: G30, G34, G02

Suggested Citation: Suggested Citation

Gow, Ian D. and Kaplan, Steven Neil and Larcker, David F. and Zakolyukina, Anastasia A., CEO Personality and Firm Policies (July 6, 2016). 6th Miami Behavioral Finance Conference, Stanford University Graduate School of Business Research Paper No. 16-34, Chicago Booth Research Paper No. 16-13, Fama-Miller Working Paper, Rock Center for Corporate Governance at Stanford University Working Paper No. 220, Available at SSRN: https://ssrn.com/abstract=2805635 or http://dx.doi.org/10.2139/ssrn.2805635