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Linking top managers’ behavioural traits with business practices and firm performance

Author

Listed:
  • Huong Trang Kim

    (Foreign Trade University)

  • Quang Nguyen

    (Middlesex University)

Abstract

We embed an experiment in an ongoing firm-level panel survey with a sample of 623 firms managed by their owners to explore the role of top managers’ behavioral traits as drivers of corporate strategies and performance. We find that present biased managers are less likely to invest in business practices, leading to lower sales revenue. Younger managers are more patient and less risk-averse than older ones, and they play a more significant role in improving firm performance than their counterparts. Interestingly, we find compelling evidence that business practices play a crucial role as a mediating mechanism through which managers’ present bias and loss aversion affect firm performance.

Suggested Citation

  • Huong Trang Kim & Quang Nguyen, 2024. "Linking top managers’ behavioural traits with business practices and firm performance," Review of Managerial Science, Springer, vol. 18(11), pages 3253-3296, November.
    • Handle: RePEc:spr:rvmgts:v:18:y:2024:i:11:d:10.1007_s11846-023-00714-0
    DOI: 10.1007/s11846-023-00714-0
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    More about this item

    Keywords

    Managers’ behavioral traits; Business practices; Corporate strategies; SMEs; Experiment;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General

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