This study aims to determine the impact of gaslighting behavior on trust in leadership, return on Asset (ROA) and stock price volatility moderating the effect of CEO tenure and board independence.
Data were collected from 160 employees of DSE-listed companies from the year 2023. Gaslighting behavior and trust in leadership data are collected through structured questionnaires. CEO Tenure, board independence, ROA, company size and leverage data are collected from annual reports and the DSE website. OLS regression analysis is carried out to determine the relationship among dependent and independent variables. The generalized method of moments (GMM) model is implemented to check its robustness and address endogeneity. All statistical analyses are carried out using STATA.
The results indicate that gaslighting behaviors undermine trust in leadership and are negatively associated with ROA. It positively affects stock price volatility. Furthermore, the moderating effects of CEO tenure and board independence on the relationship between gaslighting, trust and performance were positive, and on stock volatility, they were negative. The results are statistically significant. The variables of this research are free from multicollinearity. According to the GMM model, the robustness of the models is valid, indicating that the instruments used are valid and the models are correctly specified.
The present study differs from other literature on leadership as it blends psychological manipulation behaviors in predicting corporate results and represents the moderating effect of CEO tenure and board independence. This provides a novel perspective through manipulation behaviors that influence trust, ROA and stock price volatility in an emerging market.
