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Founder Narcissism and IPO Performance
Uzakova, Aizhan
Uzakova, Aizhan
Description
A Master of Science thesis in Finance by Aizhan Uzakova entitled, “Founder Narcissism and IPO Performance”, submitted in May 2024. Thesis advisor is Dr. Kimberly C. Gleason and thesis co-advisor is Dr. Iness Aguir. Soft copy is available (Thesis, Approval Signatures, Completion Certificate, and AUS Archives Consent Form).
Abstract
Narcissism in CEOs takes its roots in psychology and has become a widely researched topic in management since the early 2000s. Many researchers empirically show that CEO narcissism impacts firm performance, innovation and growth, policies and risk, financial leverage, and unethical or illegal behavior. In this paper, I find the influence of CEO/founder narcissism on one of the most significant strategic events in the company's life: Initial Public Offering (IPO). I use two widely used measures – underpricing and cumulative abnormal returns to measure the IPO performance. The main predictor is Narcissistic Index (NI) developed and modified by Chatterjee and Hambrick (2007 and 2011) to measure narcissism in company CEOs. The sample contains 449 companies in the USA that went public from 2014 to 2017. The results of the regression model show that, although positively correlated, founder narcissism does not have a significant effect on IPO underpricing. However, there is a significant negative impact of CEO narcissism on post-IPO performance measured by cumulative abnormal returns on a 3-month, 6-month, and 12-month time span.