Self-Dealing in Corporate Investment

76 Pages Posted: 20 Feb 2021 Last revised: 10 Oct 2022

See all articles by Paul H. Décaire

Paul H. Décaire

Arizona State University (ASU) - Finance Department

Denis Sosyura

Arizona State University

Date Written: October 7, 2022


Using hand-collected data on CEOs’ personal assets, we find that CEOs prioritize corporate investment projects that increase the value of CEOs’ private assets. Such projects are implemented sooner, receive more capital, and are less likely to be dropped. This investment strategy delivers large personal gains to the CEO but selects lower NPV projects for the firm and erodes its investment efficiency. CEO self-dealing is driven by public firms and disappears at smaller private firms where the agent is the principal. Departures of self-dealing CEOs increase firm value by 5–7%. Overall, we uncover CEOs’ private gains in capital budgeting.

Keywords: CEO, private benefits, agency, rent extraction, corporate investment

JEL Classification: G30, G34, G41

Suggested Citation

H. Décaire, Paul and Sosyura, Denis, Self-Dealing in Corporate Investment (October 7, 2022). Available at SSRN: or

Paul H. Décaire

Arizona State University (ASU) - Finance Department ( email )

W. P. Carey School of Business
PO Box 873906
Tempe, AZ 85287-3906
United States

Denis Sosyura (Contact Author)

Arizona State University ( email )

Tempe, AZ 85287-3706
United States


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