Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2023.2175008
C.E.O. characteristics and corporate risk-taking: evidence from emerging markets
Carlos Cid-Aranda
Félix López-Iturriaga
Sažetak
Although the Upper Echelon Theory predicts that C.E.O.s play a relevant
role in corporate risk-taking, the C.E.O.s’ traits that can be associated
with such risk are not well-explored. Our study fills this gap
and shows the effect of C.E.O.s’ characteristics on corporate risk-taking
of a hand-collected sample of 369 Latin American listed firms.
We study six traits: C.E.O.s’ age, tenure, gender, duality (i.e., holding
concurrent Chairman and C.E.O. roles), educational background, and
career horizon. We find that age increases risk-taking. However,
when the C.E.O.’s age reaches a given point, their concern about
reputation and retirement results in a negative relationship. We also
find that as C.E.O. tenure increases, corporate risk begins to
decrease. Nevertheless, there comes a point at which the C.E.O. uses
their knowledge and their overconfidence to make risky financial
decisions. Female C.E.O.s are negatively related to risk-taking, while
C.E.O. duality, C.E.O. educational background, foreign C.E.O.s, and a
C.E.O.’s career horizon have the opposite effect. Our study is novel
because of the focus on emerging markets and because of the use
of different market-based measures of risk-taking. We provide policymakers,
investors, and practitioners with fresh evidence about
how C.E.O.s’ risk aversion shapes the firm’s risk-taking behaviour
Ključne riječi
C.E.O.; corporate risk-taking; Latin America; C.E.O. age; C.E.O. tenure
Hrčak ID:
306842
URI
Datum izdavanja:
30.4.2023.
Posjeta: 542 *