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CEO Personality and Firm Policies

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

Ian D. Gow

Harvard University - Accounting & Control Unit

Steven N. Kaplan

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

David F. Larcker

Stanford University - Graduate School of Business

Anastasia A. Zakolyukina

University of Chicago - Booth School of Business

Multiple version iconThere 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

Gow, Ian D. and Kaplan, Steven N. 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

Ian D. Gow

Harvard University - Accounting & Control Unit ( email )

Soldiers Field
Boston, MA 02163
United States
6174956530 (Phone)

Steven Neil Kaplan

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-4513 (Phone)
773-702-0458 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

David F. Larcker

Stanford University - Graduate School of Business ( email )

Graduate School of Business
518 Memorial Way
Stanford, CA 94305-5015
United States
650-725-6159 (Phone)

Anastasia A. Zakolyukina (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773.834.4838 (Phone)
773.926.0941 (Fax)

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