Abstract
Self-serving attribution bias (SAB, hereafter) is a type of misattribution bias in which CEOs attribute the out-performance of the company to their own abilities, and under-performance of the company to bad luck or the economy. Using the transcripts of CEO interviews on CNBC, we find that the stock market response to the interviews of CEOs with self-referencing behavior is negative. Moreover, the CEOs with SAB are more likely to be fired and more sensitively to performance, especially if the governance is stronger. We also find that the stock market response to the announcement of forced turnovers of CEOs with SAB are significantly more positive by up to 9.7% over the event window of [-1,1] days. While we find the negative tone of the interviewing journalists increases the likelihood of forced CEO turnover and increases the turnover-performance sensitivity, the correlation between turnover and SAB is robust.
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