Abstract
In this paper, we test the hypothesis that CEO narcissism influences firms’ hedging behaviour. Our empirical evidence, based on hand-collected data on derivative positions in the U.S. oil and gas industry, suggests that firms with a narcissistic CEO hedge more selectively. Furthermore, we find that these firms reduce selective hedging comparatively more following a sharp price collapse that sent the industry into a state of distress. This result is in line with the ‘narcissistic paradox’: While scoring high on self-esteem and grandiosity in the normal case, such individuals are also inherently fragile and liable to crumble when faced with adversity.
| Original language | English |
|---|---|
| Pages (from-to) | 809-833 |
| Journal | European Financial Management |
| Volume | 28 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 2022 |
Subject classification (UKÄ)
- Business Administration
Free keywords
- derivatives
- narcissism
- risk management
- selective hedging