The Effects of Dominance and Optimism Displays by Male and Female CEOs on Hedge Fund Activism (WITHDRAWN)

Abstract

During interactions with external stakeholders, to convey a positive impression of the firm, two influence tactics are likely to be vivid among CEOs –dominance and optimism. Drawing on social psychological research on social influence, we theorize that these tactics are also likely to seep into the decision-making of activist hedgefunds about whether to target the firm. Although both male and female CEOs are likely to display dominance and optimism to varying degrees, we also theorize that CEO gender acts as an interpretive lens through which the credibility of these tactics is evaluated and affects the likelihood that the firm is targeted. Using data on hedge fund activism campaigns between 2011 and 2019, linguistic analyses of CEO communications with external stakeholders revealed that both dominance and optimism had a negative effect on the likelihood that the firm is targeted. This negative effect varied across male and female CEOs: firms led by male CEOs were less likely and firms led by female CEOs were more likely to be targeted when CEOs displayed higher levels of dominance or optimism. We highlight how these findings contribute to shareholder activism and gender research in the upper echelons.