Investigating the Role of Financing by Narcissistic CEOs in the Investment Efficiency of Companies Listed on the Tehran Stock Exchange

Subject Areas : Journal of Investment Knowledge

Mohammad Janalizadeh ¹ ( Department of Accounting, Aliabad Katool Branch, Islamic Azad University, Aliabad Katool, Iran. )
majid ashrafi ² ( Department of Accounting, Aliabad Katool Branch, Islamic Azad University, Aliabad Katool, Iran. )
Maryam Bokharaeian Khorasani ³ ( Department of Accounting, Aliabad Katool Branch, Islamic Azad University, Aliabad Katool, Iran. )
Gemadverdi Gorganli Doji ⁴ ( Department of Accounting, Aliabad Katool Branch, Islamic Azad University, Aliabad Katool, Iran. )

Received: 2021-10-09 Accepted : 2022-04-25 Published : 2024-12-21

Keywords: Investment Efficiency, Financing, CEO Narcissism,

Abstract :

The present study aims to investigate the role of financing by narcissistic CEOs in the investment efficiency of companies listed on the Tehran Stock Exchange. The statistical population of the study was all companies listed on the Tehran Stock Exchange between 1391 and 1398, of which 143 companies were examined as a statistical sample of the study. The results of the analysis of research hypotheses using combined regression and logistic regression showed that the narcissism of the CEO does not have a significant effect on the company's over-investment. The narcissism of the CEO does not have a significant effect on the company's under-investment. The narcissism of the CEO has a negative and significant effect on the investment efficiency of the company. Financing by narcissistic CEOs does not have a significant effect on the company's over-investment. Financing by narcissistic CEOs does not have a significant effect on the company's under-investment. Financing by narcissistic CEOs has a negative and significant effect on the investment efficiency of the company.

References:

• باقری، اکبر؛ رمضانی، علی و پورسعید، عباس. (1397). آزمون مدل تاثیرگذاری روش های تامین مالی داخلی و خارجی بر بازده کل واقعی سهام. دانش سرمایه‌گذاری، 7(26)، 185-198.


• بذرافشان، وجیهه؛ بذرافشان، آمنه و صالحی، مهدی. (1397). بررسی تاثیر حودشیفتگی مدیران بر کیفیت گزارشگری مالی. بررسی های حسابداری وحسابرسی، 25(4)، 457-478.


• تقی‌زاده خانقاه، وحید و بادآور نهندی، یونس. (1399). ارتباط بین بیش‌اطمینانی مدیریت، تأمین مالی داخلی و کارایی سرمایه‌گذاری. مجله دانش حسابداری،11(2)، 209-238.


• حیدری فراهانی، مهدیه؛ غیور، فرزاد و منصورفر، غلامرضا. (1398). تأثیر سویه‌های رفتاری مدیریت بر درماندگی مالی. پژوهش های حسابداری مالی، 11(3)، 117-134.


• خواجوی، شکرالله؛ دهقانی سعدی، علی‌اصغر و گرامی شیرازی، فرزاد. (1395). تأثیر خودشیفتگی مدیران بر مدیریت سود و عملکرد مالی. مجلۀ پیشرفت‌های حسابداری، 8(2)، 123-149.


• دموری، داریوش و قدک فروشان، مریم. (1397). سیاست های تأمین مالی و کارایی سرمایه گذاری در شرکت های پذیرفته شده در بورس اوراق بهادر تهران. راهبرد مدیریت مالی، 6(4)، 157-175.


• شالچی، افشین؛ فتحی، زاداله و شفیعی، حسین. (1401). بررسی نقش میانجی فرصت‌های رشد بر رابطه میان فرا اطمینانی مدیران و کارایی سرمایه‌گذاری. دانش سرمایه‌گذاری، 11(42)، 93-109.


• فروغی، داریوش؛ امیری، هادی و ساکیانی، امین. (1395). توانایی مدیریتی، کارایی سرمایه‌گذاری و کیفیت گزارشگری مالی. پژوهش‌های تجربی حسابداری، 1(21)، 63-90.


• ملانظری، مهناز؛ حجازی رضوان و صحرائی، محمد. (1389). بررسی رابطه بین روش های تامین مالی (منابع برون سازمانی) و موفقیت و عدم موفقیت شرکت های پذیرفته شده در بورس اوراق بهادار تهران. پژوهش های حسابداری مالی و حسابرسی، 2(6)، 65 -86.


• نمازی، محمد؛ دهقانی‌سعدی، علی‌اصغر و قوهستانی، سمانه. (1396). خودشیفتگی مدیران و استراتژی تجاری شرکت‌ها. دانش حسابداری و حسابرسی مدیریت، 6(22)، 37-52.


• هیبتی، فرشاد؛ نیکومرام، هاشم و رهنمای رودپشتی، فریدون. (1386). بازارها و نهادهای مالی، انتشارات واحد علوم و تحقیقات.


• Byun, K.-A. and Al-Shammari, M. (2021). When narcissistic CEOs meet power: Effects of CEO narcissism and power on the likelihood of product recalls in consumer-packaged goods. Journal of Business Research, 128, 45-60


• Capalbo, F., Frino, A., Lim, M.Y., Mollica, V. and Palumbo, R. (2017). The Impact of CEO Narcissism on Earnings Management. Abacus, 54(2), 210-226.


• Chatterjee, A. and Hambrick, D.C. (2007). It’s all about me: Narcissistic Chief Executive Officers and Their Effects on Company Strategy and Performance. Administrative Science Quarterly, 52, 351-386.


• Chen, F., Hope, O., Li, Q. and Wang, X. (2011). Financial reporting quality and investment efficiency of private firms in emerging markets. The Accounting Review. 86, 1255–1288.


• Dimitris, M.A. and Maria, P.B. (2011). Capital Structure, Equity Ownership and Firm Performance. Journal of Banking and Finance, (34), 621–632.


• Eaton, J., Struthers, C.W, and Santelli, A.G. (2006). Dispositional and state forgiveness: The role of self-esteem, need for structure, and narcissism. Personality and Individual Differences, 41(2), 371-380.


• Fehr, R., Gelfand, M.J. and Nag, M. (2010). The road to forgiveness: A meta-analytic synthesis of its situational and dispositional correlates. Psychological Bulletin, 136(5), 894–914.


• Foster, J.D. and Campbell, W.K. (2005). Narcissism and resistance to doubts about romantic partners. Journal of Research in Personality, 39, 550-557.


• Foster, J.D., Reidy, D.E., Misra, T.A. and Goff, J.S. (2011). Narcissism and stock market investing: Correlates and consequences of cocksure Investing. Personality and Individual Differences, 50(6), 816-821.


• Frank, M.Z. and Goyal, V.K. (2009). Capital Structure Decisions, which Factor are Reliably Important?, Financial Management, 38(1), pp 1-37.


• Frazzini, A. and Pedersen, L. (2010). Betting against beta. Working Paper. New York: New York University.


• Fung, H-G., Qiao, P., Yau, J. and Zeng, Y. (2020). Leader narcissism and outward foreign direct investment: Evidence from Chinese firms. International Business Review, 29(1), 1-11.


• Ham, C., Seybert, N. and Wang, S. (2018). Narcissism is a Bad Sign: CEO Signature Size, Investment, and Performance. Review of Accounting Studies, 23(1), 234-264.


• Hao, Y. (2022). CEO Experience, Managerial Overconfidence and Investment Efficiency: Evidence from a Natural Experiment in China. Available at SSRN: https://ssrn.com/abstract=4021697.


• He, Y., Chen, C. and Hua, Y. (2019). Managerial overconfidence, internal financing, and investment efficiency: Evidence from China. Research in International Business and Finance, 47, 501-510.


• Hirshleifer, D.A., Teoh, S.H. and Low, A. (2012). Are overconfident CEOs better innovators?. MPRA working paper, 67(4), 1457-1498.


• Hubbard, R. (1998). Capital-Market Imperfections and Investment. Journal of Economic Literature, 36, 193-225.


• Kashmiri, S., Nicol, C. and Arora, S. (2017). Me, myself, and I: Influence of CEO narcissism on firms’ innovation strategy and the likelihood of product-harm crises. Journal of the Academy of Marketing Science, 45(5), 633–656.


• Lai, S.M. and Liu, C.L. (2018), Management characteristics and corporate investment efficiency, Asia-Pacific Journal of Accounting & Economics, 1-18.


• Lewis, G.J., Lefevre, C.E. and Bates, T.C. (2012). Facial Width-to-Height Ratio Predicts Achievement Drive in US Presidents. Personality and Individual Differences, 52(7), 855-857.


• Maccoby, M. (2000). Narcissistic leaders: theincredible pros, The Iinevitable cons. HarvardBusiness Review, Pp. 69-77


• Malmendier, U. and Tate, G. (2005). CEO overconfidence and corporate investment. Journal of Finance, 60(6), 2661–2700.


• Miller, J.D. and Campbell, W.K. (2008). Comparing clinical and social personality conceptualizations of narcissism. Journal of Personality, 76, 449–476.


• O'Reilly, C.A., Doerr, B., Caldwell, D.F. and J. A. Chatman. (2014). Narcissistic CEOs and Executive Compensation. The Leadership Quarterly, 25(2), 218-231.


• Pfattheicher, S. (2016). Testosterone, cortisol and the Dark Triad: Narcissism (but not Machiavellianism or psychopathy) is positively related to basal testosterone and cortisol. Personality and Individual Differences, 97, 115-119.


• Van der Wal, R.C., Karremans, J.C. and Cillessen, A.H. (2016). Interpersonal forgiveness and psychological well-being in late childhood. Merrill-Palmer Quarterly, 62(1), 1-21.