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

Published online by Cambridge University Press:  23 March 2016

Nihat Aktas ,
Eric de Bodt ,
Helen Bollaert  and
Richard Roll
Nihat Aktas*
Affiliation:
nihat.aktas@whu.edu, WHU Otto Beisheim School of Management, Vallendar D-56179, Germany
Eric de Bodt
Affiliation:
eric.debodt@univ-lille2.fr, Université de Lille, SKEMA Business School, Lille F-59000, France
Helen Bollaert
Affiliation:
helen.bollaert@skema.edu, Université de Lille, SKEMA Business School, Lille F-59000, France
Richard Roll
Affiliation:
rroll@caltech.edu, California Institute of Technology, Division of the Humanities and Social Sciences, Pasadena, CA 91125.
*
*Corresponding author: nihat.aktas@whu.edu
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Abstract

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.

Type
Research Articles
Information
Journal of Financial and Quantitative Analysis , Volume 51 , Issue 1 , February 2016 , pp. 113 - 137
Copyright
Copyright © Michael G. Foster School of Business, University of Washington 2016 

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