Will Corporate Valuation Affect Corporate Investment Behavior?Based on an Empirical Study of CEO Narcissism

Abstract

Abstract: Analyzing a sample of China's Shanghai and Shenzhen A-share listed companies from 2012 to 2022, this study investigates the relationship between corporate valuation, CEO narcissism, and investment levels. Findings indicate that effective corporate valuation leads to higher investment levels and decreases inefficient investment.However, CEO narcissistic behavior undermines the positive influence of corporate valuation on investment levels and exacerbates its adverse impact on inefficient investment. Furthermore, the research reveals that state-owned enterprises exhibit a stronger positive correlation between corporate valuation and investment levels compared to non-state-owned enterprises. Additionally, CEO narcissistic behavior exacerbates the inhibition of the relationship between corporate valuation and investment levels in state-owned enterprises, while also intensifying the correlation between corporate valuation and investment efficiency. Moreover, the relationship between corporate valuation and inefficient investment is particularly pronounced in state-owned enterprises.Theoretical enrichment of extant research on the interplay among corporate valuation, CEO narcissism, and investment levels is provided, and practical implications for enhancing the investment climate in China's capital market are offered.

Keywords: Key word: Corporate Valuation, CEO Narcissism, Investment Levels