CEO Extraversion, Management Team Characteristics, and Firm Operating Performance

The study aims to investigate the association between CEO extraversion and firm operating performance (measured by accounting- and market-based performance), employing the Five-Factor Personality Model (FFM) (Costa and McCrae, 2000) and data from the S&P 500 firms from 2007 to 2019. CEOs' e...

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Bibliographic Details
Published in:Tai Da Guan Li Lun Cong 2024-08, Vol.34 (2), p.91-138
Main Authors: Chen, Tsung-Kang, Huang, Po-Chun, Tseng, Yijie
Format: Article
Language:chi ; eng
Subjects:
Chief executive officers
Competition
Financial performance
Personality traits
Work experience
Online Access:Get full text
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Summary:The study aims to investigate the association between CEO extraversion and firm operating performance (measured by accounting- and market-based performance), employing the Five-Factor Personality Model (FFM) (Costa and McCrae, 2000) and data from the S&P 500 firms from 2007 to 2019. CEOs' extraversion scores are estimated using the Open Language Chief Executive Personality Tool (OLCPT) (Harrison, Thurgood, Boivie, and Pfarrer, 2019). The results show a significant and positive association between CEO extraversion and firm operating performance. In addition, this study finds that homogeneity in Top Management Team (TMT) backgrounds and equity volatility significantly weaken the positive association between CEO extraversion and firm performance, while TMT shared working experience and market competitiveness significantly strengthen the positive association between CEO extraversion and firm performance. Finally, the results remain consistent even when controlling for the effects of other four personality traits (i.e. conscientiousness, neuroticism, agreeableness, and openness), employing difference-in-difference analysis, using TMT tenure homogeneity as the moderator instead, and utilizing alternative proxies of accounting- and market-based performance.
ISSN:1018-1601
2410-2490
DOI:10.6226/NTUMR.202408_34(2).0003