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Love thy neighbor: CEO extraversion and corporate acquisitions

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  • Aabo, Tom
  • Hansen, Jakob Berggreen
  • Petersen, Sebastian Malling

Abstract

We investigate the relationship between CEO extraversion and the geographical dispersion of acquisitions within the U.S. The dispersion decision is important and has implications for employment, investments, and valuation. We show that extraverted CEOs prefer local deals and that the stock market favors local acquisitions made by extraverted CEOs. Our results support the notion that the extended and information-rich, local networks of extraverted CEOs as well as the agentic qualities of these CEOs facilitate the acquisition of local target firms. Our results are important in illuminating the channels through which extraverted CEOs make acquisitions and create value.

Suggested Citation

  • Aabo, Tom & Hansen, Jakob Berggreen & Petersen, Sebastian Malling, 2023. "Love thy neighbor: CEO extraversion and corporate acquisitions," Finance Research Letters, Elsevier, vol. 55(PA).
    • Handle: RePEc:eee:finlet:v:55:y:2023:i:pa:s1544612323002805
    DOI: 10.1016/j.frl.2023.103908
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    More about this item

    Keywords

    Behavioral corporate finance; CEO extraversion; Mergers & acquisitions; Geographical dispersion;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G40 - Financial Economics - - Behavioral Finance - - - General

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