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

See all articles by Zixia (Summer) Cao

Zixia (Summer) Cao

University of Colorado Denver

Kehan Xu

City University of Hong Kong

Date Written: February 15, 2022

Abstract

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

Cao, Zixia and Xu, Kehan, CEO narcissism, brand acquisition and disposal, and stock returns (February 15, 2022). Cao, Z., & Xu, K. (2022). CEO narcissism, brand acquisition and disposal, and stock returns. Journal of the Academy of Marketing Science, 1-23., Available at SSRN: https://ssrn.com/abstract=4193150

Zixia Cao

University of Colorado Denver ( email )

1475 Lawrence St
Denver, CO 80238-3363
United States

Kehan Xu (Contact Author)

City University of Hong Kong ( email )

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