CFO Narcissism and the Power of Persuasion: Evidence from the Laboratory and Sell-Side Analyst Valuations
Publication Date
12-12-2023
Abstract
We study the role of CFO narcissism in both the intent and ability to positively influence sell-side analysts’ perceptions of the firm. In a laboratory setting, we find that narcissistic individuals are more likely to engage in persuasion to elicit higher firm valuations from financial analysts, but their persuasion attempts are targeted toward persuadable analysts. Consistent with attempts at persuasion in a public setting, conference call transcripts reveal that narcissistic CFOs exhibit greater levels of engagement with analysts, speak more optimistically, and are more likely to use argumentative prose and corporate euphemisms. Finally, consistent with narcissistic CFOs being more effective at influencing analysts’ outputs, CFO narcissism is associated with overly optimistic analyst valuations and long-horizon earnings forecasts. Collectively, the evidence suggests that narcissistic CFOs use their persuasive skills to positively influence analyst perceptions of the firm.
Document Type
Article
Keywords
Executive Narcissism, Persuasion, Sell-Side Analysts
DOI
10.2139/ssrn.4506020
Source
SMU Cox: Accounting (Topic)
Language
English
