The Moderating Role of Stereotype and Similarity Biases on the Impact of CEO Extraversion on Financial Analysts' Forecasts

Document Type : Research Paper

Authors

Department of Accounting, Isf. C., Islamic Azad University, Isfahan, Iran.

10.22103/jak.2024.23239.4036

Abstract

Objective: The extroverted personality of a chief executive officer (CEO) represents a key element of non-financial information that may influence financial analysts’ forecasts of corporate performance. Cognitive biases—specifically stereotype and similarity biases—can lead analysts to perceive extroverted CEOs as more successful leaders. Accordingly, the aim of the present study is to investigate the moderating role of stereotype and similarity bias on the effect of CEO extroversion on financial analysts' predictions.
 
Method: The present study is applied in terms of purpose and survey-based in terms of data collection. To gather the required data, a scenario-based questionnaire was employed, and the data analysis method was of an inferential nature. The statistical population of the study consisted of financial analysts, and based on the power analysis sampling method, a total of 200 financial analysts were selected during the fiscal year 2023. To test the research hypotheses, the mean comparison analysis was utilized.
 
Results: Findings indicate that CEO extraversion does not significantly affect analysts’ performance forecasts. Furthermore, stereotype and similarity biases did not moderate this relationship.
 
Conclusion: Overall, the results suggest that in Iran’s economic environment, financial analysts do not exhibit stereotype or similarity biases in their forecasts of firm performance and these biases have not led to a deviation in their predictions of company performance.

Keywords

Main Subjects

References

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  • Receive Date: 16 April 2024
  • Revise Date: 09 August 2024
  • Accept Date: 07 September 2024

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