The Impact of CEO Facial Attractiveness on Company Decisions
DOI:
https://doi.org/10.54097/k22fbj42Keywords:
CEO facial attractiveness, Personality, Enterprise decision, Facial width to height ration(fWHR).Abstract
With the transparency of the market and company systems, more and more scholars have included the chief executive officer (CEO) as an important part of company decision-making. The CEO is the company’s top manager and is responsible for formulating the company’s strategic plan and business development. Because of this, this paper takes CEO facial attractiveness as the research object to explore the CEO’s personality characteristics and the mediating role of internal and external factors in the company and conducts analysis based on the company background. Based on the content of the appeal, this paper draws the following conclusions. First: Analysis at the internal level of the company found that the facial attractiveness and personality of the CEO have an impact on corporate decision-making. This paper conducts an example analysis from two aspects: the CEO’s facial width-to-zygomatic ratio (Fwhr) and overconfident personality. The results show that decision-makers with a high fWHR ratio are more likely to have an overconfident personality. This overconfidence may lead them to overestimate their abilities, leading to more instability factors, such as wrong investment decisions and unclear risk control. Second, from the analysis of the external level of the enterprise, it is found that the company will face two decisive factors: market risk and financing decisions. Therefore, if a company has strong market capabilities, it can achieve greater profits. However, financing that is too high or too low may affect the company’s sound operations.
Downloads
References
Armstrong C E, Shimizu K. A review of approaches to empirical research on the resource-based view of the firm. Journal of Management, 2007, 33(6): 959-986.
Botelho E L, Powell K R, Kincaid S, et al. What sets successful CEOs apart. Harvard Business Review,
Tsa Wan-Hsiu S, Linjuan R M. Social CEOs: the effects of CEOs’ communication styles and parasocial interaction on social networking sites. New media & society, 2017, 19(11): 1848-1867.
Halford J T, Scott H. Beauty is wealth: CEO appearance and shareholder value. Available at SSRN, 2014, 2357756.
Kamiya S, Han Kim Y, Soohyun P. The face of risk: CEO facial masculinity and firm risk. European Financial Management, 2019, 25(2): 239-270.
Heaton James B. Managerial optimism and corporate finance. Financial management, 2002: 33-45.
Weinberg Bruce A. A model of overconfidence. Pacific Economic Review, 2009,14(4): 502-515.
Dixson Barnaby JW. Facial width to height ratio and dominance. Encyclopedia of evolutionary psychological science. Cham: Springer International Publishing, 2021, 2902-2905.
Stirrat M, David I P. Valid facial cues to cooperation and trust: Male Facial Width and Trustworthiness. Psychological Science, 2010, 21(3): 349-354.
Lefevre Carmen E. Telling facial metrics: facial width is associated with testosterone levels in men. Evolution and Human Behavior, 2013, 34(4): 273-279.
Mills J, Karen M H. CEO facial masculinity and firm financial outcomes. Corporate Board: Role, Duties and Composition, 2020, 16(1): 39-46.
Elsheikh T. CEO facial masculinity, characteristics and earnings management. Management & Accounting Review, 2022, 21(3).
Zheng X Y. An analysis of the causes of the impact of corporate investment decisions. Modern Economic Information, 2014, (21): 88+123.
Li J. Analysis of influencing factors of enterprise R&D investment decision and management suggestions. Caixun, 2019, (6): 90.
Bao W G. A discussion on corporate investment decisions. Urbanism and Architecture, 2013, (10): 164-164.
Di L J. Exploration of Enterprise Investment Decision and Risk Management. Tianjin Economy, 2023, (9):81-83.
De Bondt W F M, Thaler R H. Financial decision-making in markets and firms: A behavioral perspective. Handbooks in operations research and management science, 1995, 9: 385-410.
Wu W X, Liang H Y. Overconfidence, liquidity and asset pricing. Research on Financial and Economic Issues, 2005, (05):3-8.
Cooper A C, Woo C Y, Dunkelberg W C. Entrepreneurs’ perceived chances for success. Journal of Business Venturing, 1988, 3(2): 97-108.
Brettel M, Kasch M, Mueller A. CFO overconfidence, optimism and corporate financing. FMA Annual Meeting Paper, available at fma. org. 2008.
Ye L, Wang Y X. Managerial overconfidence, corporate investment and corporate performance – an empirical test based on China’s A-share listed companies. Journal of Shanxi University of Finance and Economics, 2013, 35 (01): 116-124.
He H Q, Zhao T Z. Managerial overconfidence and corporate overinvestment: empirical evidence based on listed companies in China. South China Finance, 2017, (12): 42-51.
Goetz S M, Shattuck K S, Miller R M, Campbell J A, Lozoya E, Weisfeld G E, Carré J M. Social status moderates the relationship between facial structure and aggression. Psychological Science, 2013, 24(11): 2329-2334.
Haselhuhn M P, Ormiston M E, Wong E M. Men’s facial width-to-height ratio predicts aggression: A meta-analysis. PloS one, 2015, 10(4).
Welker K M, Goetz S M M, Carré J M. Perceived and experimentally manipulated status moderates the relationship between facial structure and risk-taking. Evolution and Human Behavior, 2015, 36(6): 423-429.
Lazear E P. Pay equality and industrial politics. Journal of Political Economy, 1989, 97(3): 561-580.
Chen K P. Sabotage in promotion tournaments. Journal of Law, Economics, and Organization, 2003, 19(1): 119-140.
Roll. The hubris hypothesis of corporate takeovers, 1986, JB, 59, 197-216.
Bernardo A E, Welch I. On the evolution of overconfidence and entrepreneurs. Journal of Economics & Management Strategy, 2001, 10(03):301-330.
Wanli L, Guilin X, Jiayun H. Empirical research on the impact of manager overconfidence on corporate overinvestment. Journal of Shanxi University of Finance and Economics, 2014,36 (10): 76-86.
Gervais S, Odean T. Learning to be overconfident. Review of Financial Studies, 2001,14:1-27.
Bei Y, Jianguo Y. Corporate investment behavior of the company financial research review. Accounting Research, 2007, (12): 76-81.
Downloads
Published
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
