In this paper, we test the hypothesis that CEO narcissism influences firms’ hedging behaviour. Our empirical evidence, based on hand-collected data on derivative positions in the U.S. oil and gas industry, suggests that firms with a narcissistic CEO hedge more selectively. Furthermore, we find that these firms reduce selective hedging comparatively more following a sharp price collapse that sent the industry into a state of distress. This result is in line with the ‘narcissistic paradox’: While scoring high on self-esteem and grandiosity in the normal case, such individuals are also inherently fragile and liable to crumble when faced with adversity.

Me, myself and I: CEO narcissism and selective hedging

Bajo E.;
2022

Abstract

In this paper, we test the hypothesis that CEO narcissism influences firms’ hedging behaviour. Our empirical evidence, based on hand-collected data on derivative positions in the U.S. oil and gas industry, suggests that firms with a narcissistic CEO hedge more selectively. Furthermore, we find that these firms reduce selective hedging comparatively more following a sharp price collapse that sent the industry into a state of distress. This result is in line with the ‘narcissistic paradox’: While scoring high on self-esteem and grandiosity in the normal case, such individuals are also inherently fragile and liable to crumble when faced with adversity.
2022
Bajo E.; Jankensgard H.; Marinelli N.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/831473
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