Academia Meets Leadership: How Doctoral Degrees Shape CEO Communication and Impact Markets

This paper explores the influence of doctoral education on the communication styles of CEOs and their consequent impact on market participants. By examining sentiment through the dimensions of tone and vagueness, we observe that CEOs possessing doctoral degrees are inclined to employ less positive but more ambiguous language during earnings calls than their counterparts. Our findings suggest that these linguistic characteristics result from their academic training rather than the performance of the firms they lead. Furthermore, we note that both the stock market and financial analysts react positively to the distinctive communication strategies of CEOs with doctorates. Moreover, financial analysts seem to perceive the cautious language employed by these CEOs as a signal of academic rigor rather than a cause for alarm. Consequently, the impact of traditional sentiment indicators such as tone and vagueness is reduced. Lastly, while CEOs adapt to be more positive and clearer in their communication in high-tech industries, the significant gap in communication style between those with and without doctoral degrees persists.