Internal R&D or external asset growth? A closer look at CEO narcissism and entrepreneurial orientation

Yang, Lin; Lin, Zhibin; Quan, Rose; Cunningham, James; Huang, Wei

Abstract

Purpose:
In today’s competitive business environment, understanding how leadership traits shape outcomes is critical. CEO narcissism, an intriguing and debated trait, raises questions about its impact on organizational behaviour, particularly regarding entrepreneurial orientation (EO). This study aims to examine how CEO narcissism affects EO, both as aggregate and specific measures, encompassing internal and external growth. It also considers the organizational context by examining how factors such as capital intensity, firm ownership, and CEO duality moderate this relationship.

Design/methodology/approach:
To test our hypotheses, we use a sample of firms drawn from China’s ChiNext database (2008-2017). After an initial screening, the final sample consists of 251 CEOs from 239 companies. Data on CEO narcissism are collected from the firm’s official website and major online sources, while additional data are extracted from the WIND database. We use multiple regression and ordinary least squares for data analysis.

Findings:
The results show that CEO narcissism leads to external asset growth investment but not internal R&D. There is a positive relationship between CEO narcissism and EO as an aggregate measure, and also different managerial discretions play varying roles in the relationship. Specifically, capital intensity weakens this relationship, but state ownership strengthens it.

Originality/value:
This study helps to clarify the relationship between CEO narcissism and EO and advances the literature by showing that firms’ EO actions may take various forms of innovation and venturing as new entry initiations of EO. The study findings have important implications for firms to capitalise on narcissistic CEOs' entrepreneurial tendencies, balance internal R&D and external asset growth, and leverage various managerial discretions.

Citation

Yang, L., Lin, Z., Quan, R., Cunningham, J., & Huang, W. (2024). Internal R&D or external asset growth? A closer look at CEO narcissism and entrepreneurial orientation. International Journal of Entrepreneurial Behavior & Research, 31(1), https://doi.org/10.1108/IJEBR-09-2022-0797

• Journal Article Type: Article
• Acceptance Date: Oct 30, 2023
• Online Publication Date: Nov 27, 2023
• Publication Date: Jan 3, 2024
• Deposit Date: Oct 30, 2023
• Publicly Available Date: Nov 27, 2023
• Journal: International Journal of Entrepreneurial Behavior & Research
• Print ISSN: 1355-2554
• Publisher: Emerald
• Peer Reviewed: Peer Reviewed
• Volume: 31
• Issue: 1
• DOI: https://doi.org/10.1108/IJEBR-09-2022-0797
• Keywords: CEO narcissism; Entrepreneurial orientation; New initiative; Internal R&D; Innovation; External asset growth; Managerial discretion; State ownership; Capital intensity; China.
• Public URL: https://durham-repository.worktribe.com/output/1871179