Within the S&P 500, only a small fraction of chief executive officers speak with an accent or come from foreign backgrounds. The figure hovers around 10 percent. However, their share of the market is substantial.
As the proportion of CEOs with accents at major U.S. firms, such as Alphabet, NVIDIA and Microsoft, continues to rise, Anis Triki and Devendra Kale, professors in the College of Business at the University of Rhode Island, sought to explore whether CEOs’ accents can influence investor behavior.
“We talk about it all the time as academics: ‘Does a professor’s accent matter?’” said Triki. “Turning to business, we were surprised by the limited research on how accents impact investment decisions.”
So the pair set about to answer the question “Does CEO accent impact investors’ investment decisions?” Their findings—yes and no—were recently published in the Journal of Behavioral and Experimental Finance.
“Everyday investors may focus more on qualitative pieces of information instead of quantitative information when deciding what to invest in, whereas literature suggests qualitative data like accent shouldn’t matter as much for a professional investor,” said Triki.
Triki and Kale’s study examined investors’ willingness to invest up to $10K in a fictional company after being presented with different accents. One piece of information provided to study participants was a business journal article that offered context on the CEO’s reputation. The other was audio from earnings restatement calls, with the CEO’s voice digitally altered using AI to reflect American, Indian, and Kenyan accents.
“The main result was that people chose to invest more money with somebody who speaks with a foreign accent generally,” said Triki.
However, the research also revealed that when a CEO’s hypothetical reputation was poor, accent had no measurable influence on investment decisions. Conversely, accents matter more when the CEO enjoys a strong reputation.
Interestingly, of the three accents tested, CEOs with Indian and Kenyan accents attracted more hypothetical investment than those with an American accent.
While their sample size was about 290 participants, their results demonstrate a direct contrast between potential negative prejudices against foreign accents and reality.
“When we presented the research, people were pleasantly surprised because there’s been so much written about how accents can create a negative bias in general,” said Kale.
“Based on the results, if somebody’s reputation is bad, whether they have an accent or not, it’s not going to matter. But, if the CEO establishes a good reputation, then having a foreign accent could trigger higher investment decisions,” said Triki.
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