CEO Behavioral Traits and Firm Value During Market Uncertainty: A Structured Literature Review
DOI:
https://doi.org/10.33395/owner.v10i4.3694Keywords:
behavioral theory of the firm, firm value, narcissism, overconfidence, strategic mechanisms, market uncertaintyAbstract
CEO behavioral characteristics have attracted increasing attention in the corporate governance literature because they influence strategic decision-making and firm value, particularly under conditions of market uncertainty. However, prior studies on CEO overconfidence and CEO narcissism have produced inconsistent findings and provide limited understanding of the mechanisms linking these traits to firm value. This study aims to synthesize how CEO overconfidence and CEO narcissism influence firm value under market uncertainty from the perspective of the Behavioral Theory of the Firm (BTOF). A Structured Literature Review (SLR) was conducted following the PRISMA 2020 guidelines. Articles were identified through systematic searches of the Scopus and ScienceDirect databases. After identification, screening, eligibility assessment, and quality appraisal, 71 articles were included in the final review. The findings indicate that the influence of CEO behavioral traits on firm value operates indirectly through five strategic mechanisms: (1) risk taking and strategic change; (2) financial policy and resource allocation; (3) governance, disclosure, and monitoring; (4) ESG and stakeholder management; and (5) innovation and strategic renewal. Risk taking and strategic change emerged as the most dominant mechanism. Furthermore, the effects of CEO overconfidence and CEO narcissism on firm value are highly contextual and may generate either positive or negative outcomes depending on organizational and environmental conditions. This study develops an integrated framework explaining the pathways through which CEO behavioral traits affect firm value and extends the Behavioral Theory of the Firm by clarifying strategic decision-making processes under uncertainty.
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