CEO Tenure and Risk-taking
نویسندگان
چکیده
We conduct the first systematic analysis of the effect of CEO tenure on risk-taking. We document an overall positive impact of CEO tenure on risk-taking. Our results suggest that this positive relation may not be explained by tenure proxying for power, experiences, or human capital investment. Instead, the results are consistent with the hypothesis that the declining career concerns associated with longer tenure increase the risk-taking incentive of a CEO. Further, the evidence suggests that the effect of career concerns on risk-taking depends on the degree of information asymmetry about CEO ability, which is consistent with recent theoretical work. This draft: March 30, 2012
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