CEO personality and firm policies

Heidt, Antoine
Master thesis
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URI
https://hdl.handle.net/11250/2682360
Date
2020
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Abstract
This master thesis explores the relationship between the personality of chief executive officers

(CEOs) and their chosen firm policies. I am relying on the Big Five model including

its 30 facets, which has been shown to have a high out-of-sample predictive power in many

areas, and is relatively stable over time. Measures of personality are estimated through linguistic

features observed in quarterly earnings call transcripts, which are analyzed through

IBM Watson Personality Insights. This thesis extends the work by Gow et al. (2016), as it

further includes the 30 facets of the Big Five model and also added two new firm policies.

I find that the estimated measures of personality are associated to the effective tax rate, the

payout ratio, the net leverage, R&D expenses, as well as the book-to-market ratio.

Keywords: Corporate Governance, Corporate Finance, Corporate Taxation, Capital Structure,

Tax Aggressiveness

JEL Classification: G32, H26, J24