IDEAS home Printed from https://ideas.repec.org/a/taf/oabmxx/v11y2024i1p2316189.html
   My bibliography  Save this article

CEO psychological biases, firm performance and alternative mechanisms in transition economies: Evidence from Malaysia

Author

Listed:
  • Saif-Ur Rehman
  • Rachid Alami
  • Naseem Abidi

Abstract

This study examines the impact of CEO psychological biases (narcissistic and hubristic) in CEOs on a firm’s performance measured by long-term investor value appropriation (LIVA) in Malaysia. Based on a sample of 560 Malaysian firms for 2007–2022, we find the negative effect of CEO narcissism and hubris on firm performance. In comparative terms, the impact of CEO narcissism is more pronounced. Furthermore, we tested the moderating role of CEO attributes. CEO-duality and ownership moderate the CEO-narcissism/hubris LIVA negative relationships, whereas CEO tenure curtails the relationship. Furthermore, we also tested the role of governance in curtailing the effect of CEO narcissism/hubris on LIVA. The findings show that gender critical mass, foreign ownership, and group affiliation substitute the negative impact of CEO narcissism/hubris on LIVA. However, board independence and strategic alliance only weaken the negative effect of the psychological biases (narcissistic and hubristic) on LIVA. In additional analyses, gender critical mass is a substitution mechanism for the direct impact of foreign ownership and group affiliation on LIVA. This study enhances the existing knowledge on CEO narcissism and hubris by illustrating that CEO personality qualities impact the firm performance in the emerging context of Malaysia.

Suggested Citation

  • Saif-Ur Rehman & Rachid Alami & Naseem Abidi, 2024. "CEO psychological biases, firm performance and alternative mechanisms in transition economies: Evidence from Malaysia," Cogent Business & Management, Taylor & Francis Journals, vol. 11(1), pages 2316189-231, December.
    • Handle: RePEc:taf:oabmxx:v:11:y:2024:i:1:p:2316189
    DOI: 10.1080/23311975.2024.2316189
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/23311975.2024.2316189
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/23311975.2024.2316189?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:oabmxx:v:11:y:2024:i:1:p:2316189. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://cogentoa.tandfonline.com/OABM20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.