The Voice of Risk: Wall Street CEOs' Voice Pitch and the 2008 Financial Crisis

The pitch of a male voice is an honest signal of his threat potential coming from testosterone. Recognizing endogenous matches between firms and CEOs, we propose to use voice pitch of the CEO as a proxy for the unobservable risk‐taking strategy of the firm. Using digitally analyzed male CEO voice pi...

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Bibliographic Details
Published inAsia-Pacific journal of financial studies Vol. 53; no. 2; pp. 200 - 237
Main Authors Kim, Andy, Kang, Min Jung, Cao, Sijia, Park, Soohyun
Format Journal Article
LanguageEnglish
Published 01.04.2024
Subjects
Aggression
CEO turnover
Financial crisis
G01
G02
G20
G39
Media
Overconfidence
Self‐attribution bias
Testosterone
Voice pitch
Online AccessGet full text
ISSN2041-9945
2041-6156
DOI10.1111/ajfs.12471

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Summary:The pitch of a male voice is an honest signal of his threat potential coming from testosterone. Recognizing endogenous matches between firms and CEOs, we propose to use voice pitch of the CEO as a proxy for the unobservable risk‐taking strategy of the firm. Using digitally analyzed male CEO voice pitch in 167 CNBC interviews during the 2008 global financial crisis, we find that deep‐voiced Wall Street CEOs (i) managed riskier firms, (ii) received more equity‐based compensation before the crisis and (iii) were more likely to be fired after the crisis, controlling for economic incentives, overconfidence, and narcissism.
Bibliography:We thank the session participants at the AsianFA 2018 Tokyo Meeting, the seminar participants at Deakin University, KAIST, Seoul National University, Nanyang Business School, the University of Michigan Flint, Renee Adams, Sumit Agarwal, Simba Chang, Francesco D'Acunto, Martin Dierker, Joey Engelberg, Clifton Green, Daniel Hauser, Chuan Yang Hwang, Kang Koo, Noo Lee Kim, Inmoo Lee, Kuan Hui Lee, Soh Yoon Lee, Woo Jong Lee, Jennifer Lerner, Emma Li, Ed Lin, Chris Parsons, Harminder Singh, Meir Statman, Alexander Wagner, Yachang Zeng for insightful comments and suggestions. Substantial part of the data collection was done when Andy Kim was working at Nanyang Business School, Singapore. Andy Kim thanks SungKyun Research Grant 2019 that supported additional data collection. Special thanks to Li Rui, Nico Dharmawan, and You Ye of NTU and Yaelim Lee of SKKU for excellent data collection. Also, Min Jung Kang offers thanks for the Summer research grant 2016 by UM‐Flint School of Management.
ISSN:2041-9945
2041-6156
DOI:10.1111/ajfs.12471