Abstract Research Summary Prosocial CEOs, characterized by greater concern for their employees, enhance employee motivation but incur higher costs when implementing layoffs. We develop a psychological model of CEO‐firm matching wherein negative industry shocks requiring downsizing asymmetrically erode the match quality for prosocial CEOs. Leveraging increases in Chinese import competition, we show that layoff pressures lead to higher rates of both forced and voluntary turnover among prosocial CEOs. They are succeeded by less prosocial CEOs who are externally recruited, use less employee‐friendly language, lean Republican in political orientation, or are less likely to volunteer at charities. Our study highlights psychological characteristics as a key consideration in the executive labor market and draws attention to the “first‐stage” selection dynamics that shape the types of CEOs who lead firms. Managerial Summary Which firms CEOs choose to join and which CEOs are selected or retained by boards depend not only on their skills but also on the fit between their ‘personality’ and the firm's needs. We show that during industry downturns that require aggressive downsizing, prosocial CEOs are more likely to depart voluntarily, and boards actively replace them with low‐prosocial “wartime” CEOs. This dynamic nature of the CEO‐firm fit provides insights into why and when previously effective leadership may become ineffective and empirical grounds for the common distinction between peacetime and wartime CEOs. A key implication is that increasing Chinese import competition has shaped not only firm economic activities but also the psychological profiles of business leaders.

Abstract Research Summary In evaluative contexts, evaluatees typically seek to present themselves in a favorable light, while evaluators ask penetrating questions to assess these claims. Here we develop a framework to identify curveball questions : ones that are on‐topic yet perplexing (i.e., difficult to predict) relative to past discourse. We develop a language‐based measure of curveball questions and apply it to a corpus of quarterly earnings calls. After validating this question‐level measure, we next demonstrate that a call‐level curveball measure predicts absolute returns, absolute abnormal returns, and changes in a firm's average analyst rating. Finally, we identify the types of analysts who are most likely to pose curveball questions, the types of firms that are most likely to receive them, and the conditions under which they tend to arise. Managerial Summary Even a carefully crafted presentation can be derailed by a challenging question. What makes a question challenging in ways that can be disruptive and how can such a question be measured? We propose that such questions, which we label curveballs , are on‐topic, and thus difficult to dismiss or deflect, yet difficult to predict based on prior knowledge. We harness the tools of computational linguistics to develop a measure of curveball questions and apply it to the context of quarterly earnings calls. We show that this measure predicts consequential economic outcomes and highlight the conditions under which curveball questions tend to arise. Our measurement strategy can be readily extended to other evaluative contexts such as job interviews and venture capital pitches.