Narcissistic CEOs and their corporate political activity

Abstract

There has been growing scholarly interest in the impact of CEO narcissism on discrete firm outcomes. One area this CEO characteristic might impact is the firm's corporate political activity (CPA), and in fact scholars have called for further research into its antecedents. In this article, we argue that while CEO narcissism might be negatively related to CPA in general, the CPA the firms do engage in will be aimed at more ideologically extreme politicians. To test this prediction, we rely on prior research that has identified manifestations of CEO narcissism such as CEOs’ compensation and the size of their pictures in the annual report. We develop databases following this guidance that we test using panel data analysis and propensity score matching to address endogeneity. We find support for our hypotheses by testing an unbalanced panel with 10,841 observations of 2,211 publicly traded firms over a ten-year period.