CEO narcissism, brand acquisition and disposal, and stock returns
Cao, Z., & Xu, K. (2022). CEO narcissism, brand acquisition and disposal, and stock returns. Journal of the Academy of Marketing Science, 1-23.
33 Pages Posted: 26 Aug 2022
Date Written: February 15, 2022
Chief executive officer (CEO) narcissism is an ingrained personality trait referring to the degree to which an individual CEO has an inflated level of self-admiration and seeks to gain attention and social praise by pursuing vanity-driven strategic objectives. We find evidence that narcissistic CEOs are less likely to dispose of brands but more likely to acquire brands than their less narcissistic counterparts. Further, narcissistic CEOs are more likely than their counterparts to lead their companies to acquire high-awareness brands and more likely to dispose of low-awareness brands. We also propose a moderated mediation model in which CEO narcissism increases target brand asset overvaluation, and through this mediator, CEO narcissism has a negative indirect impact on the acquirer’s abnormal returns but a positive indirect impact on the seller’s abnormal returns associated with the brand transactions. Brand awareness and perceived quality weaken the relationship between target brand asset overvaluation and abnormal returns.
Keywords: CEO narcissism . Brand acquisition . Brand disposal, Brand awareness, Perceived quality, Brand asset overvaluation, Abnormal returns
JEL Classification: M31
Suggested Citation: Suggested Citation