CEO Narcissism, Divestitures and Shareholder Value - A Study on the Nordic Market

Abstract: Title: CEO Narcissism, Divestitures, and Shareholder Value: A Study on the Nordic Market Seminar date: 2019-06-03 Course: BUSN79, Degree project in Accounting & Finance, Graduate level, 15 ECTS-credits Authors: Alan Alfat, Christian Erlandsson Advisor: Håkan Jankensgård Keywords: Narcissism, Divestitures, event-study, CAR, BHAR Purpose: This study aims to investigate whether CEO Narcissism impact the quantum of shareholder value created through divestitures on the Nordic market. Methodology: The study follows a quantitative approach and it has a hypothetical- deductive structure. It includes the establishing of a hypothesis and testing it through an event study using the market model. Theoretical perspectives: The study is based on previous literature on the interdependence between shareholder value and divestitures. With the addition of introducing CEO Narcissism to the topic of divestitures. Empirical foundation: The data sample was gathered from Bloomberg Terminal. The final sample consisted of 251 and 225 observations, for the short-term and long-term assessments, respectively. The observations were listed companies on the Nordic Market between 2002-2008, and 2012-2018. Conclusions: The study found insignificant results of an impact of CEO Narcissism on the quantum of shareholder value created through divestitures on the Nordic market. Thus, the study could not confirm any evidence supporting this relationship.