Measuring Executive Personality using Machine-learning Algorithm in M&A

Abstract: This study aims to find the relationship between CEOs and CFOs’ Big Five personality traits and the cumulative abnormal return with the announcement of M&A activities by using machine-learning algorithm. We use Personality Insights with IBM Watson AI in google play store to conduct our analysis through examining CEOs and CFOs’ personal characteristics. Our research includes firms listed from 2010 to 2016 and announced M&A activities in the next three-years. The empirical results show that personality traits, agreeableness and neuroticism impact significantly. Keywords: Executive personality, Machine-learning Algorithm, Big-five, M&A JEL Classification Numbers: G34, G14, G4