Emotional Rollercoaster: The Inverted U-Shaped Relationship between CEO Emotions and Innovation Outcomes

Presenter Information

Marika Platz, Leibniz University HannoverFollow
Thomas Schaeper, University of MuensterFollow
Johann Nils Foege, Leibniz University HannoverFollow

Paper Number

2171

Paper Type

short

Description

While the literature suggests that CEOs’ emotions can affect organizational decision- making, leadership, and employee engagement, we know little about how they influence firms’ culture and outcomes of innovation. Acknowledging that innovation is a critical element for long-term success, we investigate the relationship between CEO emotions and firm innovation. The results of our analysis of 1,903 firm-year observations supports our theorizing of an inverted U-shaped relationship between CEO emotions and innovation outcomes. The findings show that moderate levels of emotions lead to the highest innovation outcomes, while extremely high or low levels decrease innovation. This study contributes to the literature by applying the Yerkes-Dodson law within upper echelon theory, demonstrating a non-linear relationship between CEO emotions and innovation, and utilizing a novel algorithm to measure CEO emotions more objectively.

Comments

14-DigitalInnovation

Recommended Citation

Platz, Marika; Schaeper, Thomas; and Foege, Johann Nils, "Emotional Rollercoaster: The Inverted U-Shaped Relationship between CEO Emotions and Innovation Outcomes" (2023). ICIS 2023 Proceedings. 16.
https://aisel.aisnet.org/icis2023/diginnoventren/diginnoventren/16