CEO Narcissism and the Takeover Process: From Private Initiation to Deal Completion

Chief executive officer (CEO) narcissism affects the takeover process. Acquirer shareholders react less favorably to a takeover announcement when the target CEO is more narcissistic. Narcissistic acquiring CEOs negotiate faster. They are also marginally more likely to initiate deals. Acquirer CEO narcissism and target CEO narcissism are associated with a lower probability of deal completion and reduce the likelihood that the target CEO will be employed by the merged firm. Our findings highlight the importance of both acquirer and target CEO psychological characteristics throughout the takeover process

CEO Narcissism and the Takeover Process: From Private Initiation to Deal Completion

Chief executive officer (CEO) narcissism affects the takeover process. Acquirer shareholders react less favorably to a takeover announcement when the target CEO is more narcissistic. Narcissistic acquiring CEOs negotiate faster. They are also marginally more likely to initiate deals. Acquirer CEO narcissism and target CEO narcissism are associated with a lower probability of deal completion and reduce the likelihood that the target CEO will be employed by the merged firm. Our findings highlight the importance of both acquirer and target CEO psychological characteristics throughout the takeover process

Caractéristiques des dirigeants et performances des entreprises

Dans les trois chapitres de cette thèse nous explorons le lien entre les performances des entreprises et les caractéristiques psychologiques des dirigeants. Dans un premier chapitre conceptuel, nous étudions les fondements théoriques des travaux en finance comportementale d'entreprise en analysant l'hubris et les concepts qui lui sont apparentés. Nous suggérons des pistes de recherche futures qui, pour certaines, sont mises en oeuvre dans les deux autres chapitres de ce travail. Dans le second chapitre, nous étudions l'impact du narcissisme des dirigeants acquéreurs et cibles sur les aspects privés d'un échantillon de fusions-acquisitions américaines. Nos résultats indiquent que desniveaux de narcissisme plus élevés chez les dirigeants acquéreurs sont associés à une plus forte probabilité que l'acquéreur initie l'opération et à une période plus courte entre l'initiation de l'opération et son annonce publique. Nos résultats suggèrent également que des niveaux de narcissisme plus élevés chez les dirigeants cibles sont positivement associés à la prime offerte et négativement associés aux rendements anormaux cumulés de l'acquéreur. Dans le troisième chapitre, nous analysons l'effet du leadership authentique du dirigeant sur les performances boursières etd'exploitation d'un échantillon d'entreprises du SBF 250. Nous collectons des données sur le leadership authentique par le biais de questionnaires. Nous analysons la différence entre les performances des entreprises en les affectant à trois portefeuilles selon le niveau de leadership authentique en utilisant l'analyse en trois facteurs de Fama et French. Nous ne trouvons aucun lien significatif entre le niveau de leadership authentique du dirigeant et la performance boursière. Dansles analyses des performances d'exploitation, nous trouvons un lien positif et significatif entre le niveau de leadership authentique et la rentabilité économique (ROA).We study the effect of CEO psychological characteristics on firm performance in three papers. We first consider the theoretical background to work in behavioral corporate finance in a conceptual paper analyzing hubris and related psychological concepts. In this paper we put forward ideas for future research, some of which we implement subsequent papers. In paper 2, we study the effect of acquirer and target CEO narcissism on the private aspects of the takeover process in a sample of US M&A deals. We find that higher levels of acquirer CEO narcissism are associated with a higher probability of deal initiation by the acquirer and with a shorter length of time between deal initiation and announcement. Concerning value effects, our results suggest that higher levels of target CEO narcissism are positively related to bid premium and negatively related to acquirer cumulative abnormal returns. In addition, the difference between acquirer and target CEO narcissism is a significant factor in explaining the different aspects of the takeover process. In the third paper, we analyze the effect of CEO authentic leadership on the market and operating performance of a sample of listed French firms. We collect data on CEO authentic leadership using questionnaires. We analyze the difference in performance of firms sorted into three portfolios according to the level of CEO authentic leadership using a Fama French three factor analysis. We fail to find a significant relationship between CEO authentic leadership and market performance. In the operating performance analyses, we find a positive association between CEO authentic leadership and ROA

Changes in corporate governance quality in Estonia between 1999 and 2007

This article documents significant improvements in the quality of corporate governance in Estonian listed firms between 1999 and 2007. Basing our approach in the agency theory framework, we construct a corporate governance index reflecting the specificities of transition economies in general and Estonia in particular. We base our index on best practice using a number of widely recognised sources. Using hand-collected publicly available data for 1999 and 2007, we calculate a corporate governance score for every listed company. Comparing the scores, we find an overall improvement in corporate governance during the period, which coincided with Estonia's accession to the EU. We find evidence that some corporate governance practices are better in cross-listed firms and those which were already in existence in 1989 and which were subsequently privatised. We identify some areas of corporate governance where practices could be enhanced.

Beyond the dark side of executive psychology: Current research and new directions

Summary In corporate finance and strategic management, the idea of executive hubris has come to dominate perceptions of the psychology of top managers. We analyze existing research and identify issues in definitions and measurement and describe how researchers have fallen prey to hubris fascination. This leads us to put forward two options for future research: within the hubris tradition (improving measures and examining positive aspects and antecedents) and outside it (basing analyses on the self rather than the ego and using a more dynamic and holistic approach).Top executives Hubris Overconfidence Narcissism Authenticity Self Corporate finance Strategic management

Management control systems in SMEs: a study using a contingency approach

The aim of this exploratory research is to analyse Management Control Systems (MCS) using a comprehensive contingency approach in a sample of SMEs. Although existing research has demonstrated that MCS design is influenced by a number of factors, its role in the SME context has received little attention. We define MCS applying the mechanistic-organic continuum and develop hypotheses taking into account the specificities of SMEs. We use quantitative methodology, collecting data through a survey and testing our hypotheses in a moderated regression analysis. The results show that both MCS characteristics and scope are important in determining factors affecting MCS. General manager characteristics are the most significant explanatory variables. Depending on the scope, technology and strategy explain some aspects of MCS in SMEs while the environment is significant in explaining others. Our research reveals the coexistence of aspects of MCS which have previously been considered mutually exclusive