Does CEO Narcissism Drive Asymmetric Cost Behavior?

[Purpose]The purpose of this study is to examine the impact of CEO narcissism on asymmetric cost behavior. [Methodology]We utilize data from distributed transcripts of earnings conference calls for each CEO obtained from S&P Capital IQ, focusing on S&P 1500 firms for the period from 2007 to 2018. [Findings]We find that CEO narcissism is positively associated with the degree of cost stickiness, aligning with our hypothesis. To further validate the main finding, we conduct two robustness tests. The results show that the main finding remain robust even after (1) replacing the raw values of CEO narcissism score with the rank variables (i.e., tercile, quartile, quintile, and decile) as alternative measures, and (2) additionally controlling for other CEO personality (specifically, the Big 5 personality traits). [Implications]Overall, this study makes incremental contributions by suggesting the first empirical evidence that CEO narcissism plays a significant role in decision－making regarding asymmetric cost behavior.