CEOs’ social media messages, perceived personality and M&A decisions

We explore the possibility of using CEOs' social media messages to measure their personality. We use independent observers to measure CEOs' perceived personality based on the popular Big Five personality model. We use M&A initiations to validate the quality of our Big Five personality measures. We test our predictions using the CEOs' verified Twitter accounts for publicly listed U.S. firms. We find that CEO's openness to experience, one of the Big Five personality traits, is positively associated with the likelihood of M&A initiations and the effect of openness to experience is stronger for diversifying M&As than for non-diversifying M&As. We find no evidence that our tweet-based measures for CEO's other Big Five personality attributes (extraversion, consciousness, agreeableness, and neuroticism) are associated with M&A outcomes as predicted. Our results suggest that CEOs' social media messages contain some useful information about their personality that can be used to better understand publicly listed firms' strategic decisions