The impact of CEO narcissism on M&A performance – Examining on different narcissism variables

Sammanfattning: This research study uses an event study regressing cumulative abnormal returns on four different narcissism measures and additional control variables. Moreover, a regression of M&A intensity, measured by the deal size divided by the total market capitalisation of the acquirer, is regressed on the beforementioned narcissism measures and different control variables. Supplementary, the different measures for CEO narcissism are analysed in detail and compared with each other. The authors find evidence for different impacts on abnormal returns and M&A intensity depending on the narcissism measure that is analysed. There is not one specific measure that can be recommended to use in future research. The outcome is extremely dependent on the definition of narcissism and the way to measure it, as all variables used are showing different results. According to these results, previous research using just one variable trying to measure the phenomenon of narcissism should be critically scrutinised. Even though each of these methods are profound and scientifically recognised, their interchangeable application has to be challenged, since all methods measure the same phenomenon, narcissism, but make use of different characteristics of a narcissist. Since this research field is still quite young and little explored, there is still room for further research and extended measurement methods that measure narcissism in other ways and thus provide a supplementary and extended contribution to the literature. In order to obtain further sound and comparable research results in business and corporate finance research, it is therefore indispensable to develop a standardised and uniform measurement method for narcissism.