Abstract
Psychological research shows that as the main component of enterprise decision-making, CEOs are not completely rational, cognitive and psychological biases often influence their decision-making process. CEO narcissism has gradually attracted academic attention. Based on upper echelon theory and subconscious theory, this paper uses advanced artificial intelligence technology to quantify CEO narcissism as a kind of emotional intelligence. Taking A-share listed companies in China from 2010 to 2019 as research objects, this paper empirically tests the impact of CEO narcissism on debt financing and innovation performance. The results show that CEO narcissism has a significant positive impact on firm innovation performance. Debt financing plays a mediating role in the relationship between CEO narcissism and firm innovation performance. CEO narcissism can have a positive impact on firm innovation performance through debt financing. Compared with non-SOEs, SOEs' CEO narcissism has a more significant positive effect on debt financing and enterprise innovation performance. The research in this paper enriches psychology and organizational management and provides a reference for an enterprise's management decisions and for investors' investment decisions.
Highlights
Corporate innovation is influenced by executives, especially narcissistic CEOs, such as Elon Musk, CEO of Tesla and SpaceX; Steve Jobs, former CEO of Apple; Bill Gates, former CEO of Microsoft; Mingzhu Dong, former CEO of Gree Air Conditioning Co.; Yueting Jia, former CEO of Letv; and other CEOs of famous enterprises, who showed different degrees of narcissistic personality tendencies
The following assumptions are made: H1: CEO narcissism is positively correlated with debt financing
Existing studies have explored the impact of CEO narcissism on enterprise innovation performance from different perspectives, the research is not perfect, and there are few studies from the perspective of debt financing
Summary
Corporate innovation is influenced by executives, especially narcissistic CEOs, such as Elon Musk, CEO of Tesla and SpaceX; Steve Jobs, former CEO of Apple; Bill Gates, former CEO of Microsoft; Mingzhu Dong, former CEO of Gree Air Conditioning Co.; Yueting Jia, former CEO of Letv; and other CEOs of famous enterprises, who showed different degrees of narcissistic personality tendencies. External institutions, especially the news media, tend to pay more attention to the risky decision-making of enterprises, and debt financing for R&D investment is a risky behavior that can bring more attention to enterprises and to some extent can satisfy the narcissistic CEO’s desire for external attention and increase their sense of superiority Based on these observations, the following assumptions are made: H1: CEO narcissism is positively correlated with debt financing. This article speculates that state-owned enterprises have a significant positive moderating effect on the relationship between CEO narcissism, debt financing and corporate innovation performance. CEOs with a high degree of narcissism will make full use of national innovation resources, carry out debt financing, increase R&D investment, and improve corporate innovation performance. The narcissistic CEOs of state-owned enterprises actively cater to national policies to demonstrate their image as excellent leaders and increase debt financing to promote R&D investment and improve corporate innovation performance. The absolute value of the maximum pairwise correlation coefficient between variables is 0.379, indicating that there is no serious multicollinearity between variables
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