CEO Affective States and Firm Performance

Alejandra Inostroza Correa; Jorge Sepúlveda Velásquez; Cristián Céspedes

doi:10.1111/issj.70011

August 17, 2025International Social Science Journal

CEO Affective States and Firm Performance

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Key Points

Negative ceo affective states significantly impair corporate performance in smes, indicating important leadership impacts.
Findings reveal a variation of financial performance influenced by ceo's positive affect, suggesting complexity in leadership effects.
Using ordinary least squares and other techniques, the analysis assesses the influence of individual characteristics on performance.
This research may enable decision makers to enhance firm profitability by understanding the effects of ceo attributes.],
simple_explanation':'CEOs can influence how well their companies perform through their emotions. This research shows that when CEOs feel negative emotions, their companies often do worse financially. In contrast, the impact of positive emotions on performance is complicated and varies. Understanding these emotional effects can help companies make better decisions and improve their success. 📈'} ️ } ️ ️ } ️ ️ } ️ ️ ️ } ️ ️ ️ ️ ️ ️ } ️ ️ ️ ️ ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ ️ } ️ ️ } ️ ️ } ️ } ️ ️ ️ } ️ ️ ️ } ️ ️ } ️ ️ ️ ️ ️ ️ } ️ ️ } ️ ️ } ️ } ️ ️ } ️ ️ } ️ ️ ️ } ️ } ️ ️ } ️ ️ } ️ } ️ ️ } ️ } ️ ️ } ️ ️ } ️ ️ ️ } ️ } ️ ️ } ️ ️ } ️ ️ } ️ ️ } ️ } ️ ️ } ️ ️ } ️ } ️ ️ } ️ } ️ ️ } ️ ️ } ️ ️ } ️ ️ ️ } ️ ️ ️ } ️ ️ ️ } ️ ️ } ️ } ️ } ️ } ️ } ️ } ️ ️ } ️ ️ } ️}} ️ ️ ️ } ️ ️ } ️ } ️ ️ } ️ ️ ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ ️ } ️ } ️ ️ } ️ ️ } ️ } ️ ️ } ️ ️ } ️ }} ️ ️ ️ } ️) ️ ️ } ️ ️ } ️ ️ } ️ ️ } ️ ️ } ️ ️ } ️ ️ } ️ ️ ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ ️ } ️ ️ } ️ ️ } ️ ️ } ️} ️ ️ } ️ ️ } ️ ️ } ️ ️ } ️ ️ ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ } ️ ️ } ️ ️ } ️ ️ } ️} ️ ️ } ️ ️} ️ ️ } ️ ️}} ️ ️ } ️ } ️ } ️} ️ ️ } ️ ️ } ️ } ️ ️ } ️ }} ️ ️ } ️ } ️ ️ } ️ ️ ️ } ️ } ️ } ️ } ️ ️ } ️}} ️ ️ ⃝} ️ } ️ }} ️ } ️ ️ ️ } ️ ️ } ️ } ️ } ️ }} ️} ️ }} ️} ️ ️ } ️ ️ } ️ ️ } ️ ✱ ️ } ️}} ️} ️ ️ } ️ ️ }} ️ } ️ }} ️ 🎇 ️}} ️ ️}} ️}} ️}} ️}} ️}} ️}} ️ ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️ ️ ️ } ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️ ️}} ️}} ️}}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️ ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️ ️ } ️}} ️ ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️ }} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}} ️}}

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Implication

Analysis of CEO affective states reveals significant effects on SME profitability in Chile, highlighting implications for management.

Abstract

Even though the effect of CEO personality on business aspects like leadership and organizational culture has been studied in small and medium‐sized enterprises (SMEs), its effect on performance in emerging economies remains vague in literature. This study seeks to examine the influence of CEOs’ affective states on the financial performance of SMEs, specifically within the framework of an emerging economy. A sample of SMEs from Chile in 2017 is analysed. Employing ordinary least squares (OLS), propensity score matching (PSM) and bootstrap regression techniques, we argue that CEOs’ negative affective states significantly impair corporate performance. Contrary to predictions, our results show that CEOs’ favourable affect varies with financial performance. This difference in impact between positive and negative affective states sheds light on how CEO attributes affect SME performance. Our research illustrates an association between the profitability of SMEs, the individual characteristics of CEOs and their affective states, increasing the empirical evidence on a topic that has been relatively understudied. Our findings would help decision makers, institutions and managers to improve their understanding of the factors that influence the financial profitability of firms and thereby sustain their development over time.

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Cite This Study

Correa et al. (2025) studied this question.

synapsesocial.com/papers/68af453aad7bf08b1ead2919 https://doi.org/10.1111/issj.70011

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CEO Affective States and Firm Performance

Key Points

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Implication

Abstract

Discussion

Cite This Study

CEO Affective States and Firm Performance

Key Points

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Implication

Abstract

Discussion

Cite This Study

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