CEOs' general managerial skills and corporate risk taking subject to the moderator of CEO tenure

In this study, we examine the relation between chief executive officers' (CEOs') general managerial skills and firms' risk‐taking behaviour. We find that generalist CEOs are associated with significantly higher firm risk, with the association decreasing significantly with CEO tenure....

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Published inEuropean financial management : the journal of the European Financial Management Association Vol. 29; no. 5; pp. 1620 - 1656
Main Authors Leng, Tiecheng, Pan, Luyao
Format Journal Article
LanguageEnglish
Published Oxford Blackwell Publishing Ltd 01.11.2023
Subjects
Chief executives
Risk behavior
Risk taking
Transformation
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Summary:In this study, we examine the relation between chief executive officers' (CEOs') general managerial skills and firms' risk‐taking behaviour. We find that generalist CEOs are associated with significantly higher firm risk, with the association decreasing significantly with CEO tenure. We propose the following managerial skills transformation explanation: the longer a CEO stays with a firm, the less general and more firm specific the CEO's skills and knowledge become; therefore, any effect of the CEO's general managerial skills only appears in the early years of tenure.
Bibliography:ObjectType-Article-1
SourceType-Scholarly Journals-1
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ISSN:1354-7798
1468-036X
DOI:10.1111/eufm.12401