CEO values and corporate performance: A text mining and LLM-based approach
DOI:
https://doi.org/10.18559/ebr.2025.3.2172Keywords:
CEO, personal values, corporate performance, text mining, ChatGPTAbstract
This study examines the effects of CEO values on corporate performance across five standard dimensions of companies’ activity: liquidity, profitability, solvency, operating efficiency, and valuation. Utilising two complementary approaches – dictionary-based text mining and a ChatGPT-based approach to analyse over 4900 CEO interviews, we identified the CEO Schwartz value profiles and compared them with corporate outcomes. We found that CEOs prioritising the Achievement value enhance corporate profitability. In turn, CEOs with a strong orientation toward Security mostly tend to prioritise financial liquidity and long-term value creation, potentially sacrificing short-term profits. Additionally, CEOs emphasising Self-direction or Stimulation maintain higher cash reserves, with less focus on operating efficiency. The results show that CEOs’ values may lead to different strategies and, as a consequence, differences in companies' financial results. Additionally, the results enable better understanding of the sources of these differences.
JEL Classification
Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making (D91)
General (G30)
Firm Performance: Size, Diversification, and Scope (L25)
Downloads
References
Adams, R. B., Licht, A. N., & Sagiv, L. (2011). Shareholders and stakeholders: How do directors decide? Strategic Management Journal, 32(12), 1331–1355. https://doi.org/10.2139/ssrn.1549482
View in Google Scholar
Banning, F., Reale, J., & Roos, M. (2023). The complexity of corporate culture as a potential source of firm profit differentials. https://doi.org/10.2139/ssrn.4508695
View in Google Scholar
Bardi, A. & Goodwin, R. (2011). The dual route to value change: Individual processes and cultural moderators. Journal of Cross-Cultural Psychology, 42(2), 271–287. https://doi.org/10.1177/0022022110396916
View in Google Scholar
Bates, D., Mächler, M., Bolker, B., & Walker, S. (2015). Fitting linear mixed-effects models using Ime4. Journal of Statistical Software, 67(1). https://doi.org/10.18637/jss.v067.i01
View in Google Scholar
Berle, A. A. (1932). For whom corporate managers are trustees: A note. Harvard Law Review, 45(8), 1365–1372. https://doi.org/10.2307/1331920
View in Google Scholar
Bernile, G., Bhagwat, V., & Rau, P. R. (2017). What doesn’t kill you will only make you more risk‐loving: Early‐life disasters and CEO behavior. The Journal of Finance, 72(1), 167–206. https://doi.org/10.1111/jofi.12432
View in Google Scholar
Berson, Y., Oreg, S., & Dvir, T. (2008). CEO values, organizational culture and firm outcomes. Journal of Organizational Behavior, 29(5), 615–633. https://doi.org/10.1002/job.499
View in Google Scholar
Bilsky, W., Janik, M., & Schwartz, S. H. (2011). The structural organization of human values-evidence from three rounds of the European Social Survey (ESS). Journal of Cross- Cultural Psychology, 42(5), 759–776. https://doi.org/10.1177/0022022110362757
View in Google Scholar
Bromiley, P., & Rau, D. (2016). Social, behavioral, and cognitive influences on upper echelons during strategy process: A literature review. Journal of Management, 42(1), 174–202. https://doi.org/10.1177/0149206315617240
View in Google Scholar
Carpenter, M. A., Geletkanycz, M. A., & Sanders, W. G. (2004). Upper echelons research revisited: Antecedents, elements, and consequences of top management team composition. Journal of Management, 30(6), 749–778. https://doi.org/10.1016/j.jm.2004.06.001
View in Google Scholar
Chen, Y., Dou, P. Y., Rhee, S. G., Truong, C., & Veeraraghavan, M. (2015). National culture and corporate cash holdings around the world. Journal of Banking & Finance, 50, 1–18. https://doi.org/10.1016/j.jbankfin.2014.09.018
View in Google Scholar
Chen, Y. R., Ho, K. Y. & Yeh, C. W. (2020). CEO overconfidence and corporate cash holdings. Journal of Corporate Finance, 62, 101577. https://doi.org/10.1016/j.jcorpfin.2020.101577
View in Google Scholar
Custódio, C., & Metzger, D. (2014). Financial expert CEOs: CEO’s work experience and firm’s financial policies. Journal of Financial Economics, 114(1), 125–154. https://doi.org/10.1016/j.jfineco.2014.06.002
View in Google Scholar
Damodaran, A. (2014). Applied corporate finance (4th ed.). John Wiley & Sons.
View in Google Scholar
Damodaran, A. (2020). Data update 6 for 2020: Profitability, returns and the value of growth. https://aswathdamodaran.blogspot.com/2020/03/data-update-6-for-2020-profitability.html
View in Google Scholar
ESS. (2024). ESS11 – integrated file, edition 3.0. https://doi.org/10.21338/ess11e01_0
View in Google Scholar
Faccio, M., Marchica, M. T., & Mura, R. (2016). CEO gender, corporate risk-taking, and the efficiency of capital allocation. Journal of Corporate Finance, 39, 193–209. https://doi.org/10.1016/j.jcorpfin.2016.02.008
View in Google Scholar
Fischer, R., Karl, J., Fetvadjiev, V., Grener, A., & Luczak-Roesch, M. (2022). Opportunities and challenges of extracting values in autobiographical narratives. Frontiers in Psychology, 13, 886455. https://doi.org/10.3389/fpsyg.2022.886455
View in Google Scholar
Gorgievski, M. J., Ascalon, M. E., & Stephan, U. (2011). Small business owners’ success criteria, a values approach to personal differences. Journal of Small Business Management, 49(2), 207–232. https://doi.org/10.1111/j.1540-627x.2011.00322.x
View in Google Scholar
Greiner, M., Kim, J., & Thor, J. C. (2023). CEO values as antecedents to corporate political activity: An empirical exploration. Journal of Business Research, 160, 113808. https://doi.org/10.1016/j.jbusres.2023.113808
View in Google Scholar
Gröber, M., Freisinger, E., Henkel, S., & Heidenreich, S. (2023). How valuable are personal values? Investigating personal values and their effect on entrepreneurial performance. International Journal of Entrepreneurial Venturing, 15(6), 534–559. https://doi.org/10.1504/ijev.2023.10061495
View in Google Scholar
Haerpfer, C., Inglehart, R., Moreno, A., Welzel, C., Kizilova, K., Diez-Medrano J., M. Lagos, P. Norris, E. Ponarin & B. Puranen (Eds.). (2022). World Values Survey Wave 7(2017–2022). World Values Survey. https://doi.org/10.14281/18241.20
View in Google Scholar
Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. The Academy of Management Review, 9(2), 193–206. https://doi.org/10.2307/258434
View in Google Scholar
Hoffmann, W. H., & Meusburger, L. (2018). How CEO values and TMT diversity jointly influence the corporate strategy making process. Schmalenbach Business Review, 70, 149–187. https://doi.org/10.1007/s41464-017-0042-y
View in Google Scholar
Hu, C., & Liu, Y. J. (2015). Valuing diversity: CEOs’ career experiences and corporate investment. Journal of Corporate Finance, 30, 11–31. https://doi.org/10.1016/j.jcorpfin.2014.08.001
View in Google Scholar
Jensen, M. (2001). Value maximisation, stakeholder theory, and the corporate objective function. European Financial Management, 7(3), 297–317. https://doi.org/10.1111/1468-036x.00158
View in Google Scholar
Kaplan, R. S., & Norton, D. P. (1992). The balanced scorecard: Measures that drive performance. Harvard Business Review, 70(1), 71–79.
View in Google Scholar
Kojima, T., Gu, S. S., Reid, M., Matsuo, Y., & Iwasawa, Y. (2022). Large language models are zero-shot reasoners. arXiv preprint arXiv:2205.11916
View in Google Scholar
Koller, T., Goedhart, M., & Wessels, D. (2025). Valuation: Measuring and managing the value of companies. John Wiley & Sons.
View in Google Scholar
Kotey, B., & Meredith, G. G. (1997). Relationships among owner/manager personal values, business strategies, and enterprise performance. Journal of Small Business Management, 35(2). https://www.researchgate.net/publication/279562195_Relationships_among_ownermanager_personal_values_business_strategies_and_enterprise_performance
View in Google Scholar
Kraatz, M. S., Flores, R., & Chandler, D. (2020). The value of values for institutional analysis. Academy of Management Annals, 14(2), 474–512. https://doi.org/10.5465/annals.2018.0074
View in Google Scholar
Liu, C., Xu, L., Yang, H., & Zhang, W. (2023). Prosocial CEOs and the cost of debt: Evidence from syndicated loan contracts. Journal of Corporate Finance, 78, 102316. https://doi.org/10.1016/j.jcorpfin.2022.102316
View in Google Scholar
Naeem, M., & Khurram, S. (2020). Does a CEO’s culture affect dividend policy? Finance Research Letters, 35, 101302. https://doi.org/10.1016/j.frl.2019.09.017
View in Google Scholar
Ndruru, F. (2025). The role of liquidity management in enhancing corporate financial stability: A systematic literature review on cash reserves and marketable securities strategies. Productivity: Journal of Integrated Business, Management, and Accounting Research, 2(1), 9–17.
View in Google Scholar
Nguyen, T. K. G., Ozawa, T., & Fan, P. (2024). Sanpo-yoshi, top management personal values, and ESG performance. Journal of Behavioral and Experimental Finance, 41, 100903. https://doi.org/10.1016/j.jbef.2024.100903
View in Google Scholar
OpenAI. (2024a). GPT-4o mini: advancing cost-efficient intelligence. https://openai. com/index/gpt-4o-mini-advancing-cost-efficient-intelligence/
View in Google Scholar
OpenAI. (2024b). GPT-4o-mini-2024-07-18. https://chat.openai.com/chat
View in Google Scholar
Osei Bonsu, C., Liu, C., & Yawson, A. (2024). The impact of CEO attributes on corporate decision-making and outcomes: A review and an agenda for future research. International Journal of Managerial Finance, 20(2), 503–545. https://doi.org/10.1108/ijmf-02-2023-0092
View in Google Scholar
Parmenter, D. (2015). Key performance indicators: Developing, implementing, and using winning KPIs. John Wiley & Sons.
View in Google Scholar
Ponizovskiy, V., Ardag, M., Grigoryan, L., Boyd, R., Dobewall, H., & Holtz, P. (2020). Development and validation of the personal values dictionary: A theory–driven tool for investigating references to basic human values in text. European Journal of Personality, 34(5), 885–902. https://doi.org/10.1002/per.2294
View in Google Scholar
Robinson, T. R., Henry, E., Pirie, W. L., & Broihahn, M. A. (2012). International financial statement analysis (vol. 39). John Wiley & Sons.
View in Google Scholar
Roccas, S., Sagiv, L., Schwartz, S. H., & Knafo, A. (2002). The big five personality factors and personal values. Personality and Social Psychology Bulletin, 28(6), 789–801. https://doi.org/10.1177/0146167202289008
View in Google Scholar
Sagiv, L., Sverdlik, N., & Schwarz, N. (2011). To compete or to cooperate? Values’ impact on perception and action in social dilemma games. European Journal of Social Psychology, 41(1), 64–77. https://doi.org/10.1002/ejsp.729
View in Google Scholar
Schwartz, S. H. (1992). Universals in the content and structure of values: Theoretical advances and empirical tests in 20 countries. Advances in Experimental Social Psychology, 25, 1–65. https://doi.org/10.1016/s0065-2601(08)60281-6
View in Google Scholar
Schwartz, S. H. (2005). Robustness and fruitfulness of a theory of universals in individual human values. In A. Tamayo & J. B. Porto (Eds.), Valores e trabalho (pp. 56–95). Editora Universidade de Brasilia.
View in Google Scholar
Schwartz, S. H. (2012). An overview of the Schwartz theory of basic values. Online Readings in Psychology and Culture, 2(1). https://doi.org/10.9707/2307-0919.1116
View in Google Scholar
Wahlen, J. M., Baginski, S. P., & Bradshaw, M. T. (2011). Financial reporting, financial statement analysis, and valuation: A strategic perspective. Cengage Learning.
View in Google Scholar
Wang, L. H., & Fung, H. G. (2022). The effect of female CEO and CFO on tail risk and firm value. Finance Research Letters, 47, 102693. https://doi.org/10.1016/j.frl.2022.102693
View in Google Scholar
Wooldridge, J. M. (2010). Econometric analysis of cross section and panel data. MIT Press.
View in Google Scholar
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Paweł Oleksy, Matthias Reccius, Marcin Czupryna
This work is licensed under a Creative Commons Attribution 4.0 International License.
