This study investigates the relationship between CEO narcissism and debt financing costs, highlighting a potential trade-off between leadership traits and firm financial well-being. While prior research has identified potential benefits associated with narcissistic CEOs, such as enhanced innovation, we demonstrate that such leadership incurs higher borrowing costs, as evidenced by elevated bond yields in firms led by narcissistic executives. This effect is amplified for grandiose narcissists, suggesting that investors are particularly wary of their risk-taking tendencies. Leveraging a natural experiment, we establish a robust causal link between narcissism and debt costs, revealing higher bond yield premiums demanded by investors in firms with narcissistic CEOs. These findings underscore the critical importance of considering CEO personality traits, particularly narcissism when evaluating corporate governance practices and ensuring optimal alignment with stakeholders' interests.

中文翻译：

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CEO自恋与债务代理成本

这项研究调查了首席执行官自恋与债务融资成本之间的关系，强调了领导特质与公司财务状况之间的潜在权衡。虽然之前的研究已经确定了自恋首席执行官的潜在好处，例如增强创新，但我们证明，这种领导力会带来更高的借贷成本，自恋高管领导的公司债券收益率上升就证明了这一点。对于浮夸自恋者来说，这种效应会被放大，这表明投资者对他们的冒险倾向特别警惕。利用自然实验，我们在自恋与债务成本之间建立了强有力的因果关系，揭示了具有自恋首席执行官的公司的投资者要求更高的债券收益率溢价。这些发现强调了在评估公司治理实践和确保与利益相关者利益最佳一致时考虑首席执行官人格特质的至关重要性，特别是自恋。