Abstract
Career concerns can limit a manager's willingness to take risks, which can lead to excessive policy conservatism. An increase in a CEO's ability and willingness to change jobs (CEO mobility) can diversify her human capital and reduce her conservatism. We derive several CEO mobility measures and relate them to a policy riskiness index that captures the overall risk embedded in a firm's corporate policies. We find a strong positive relation between CEO mobility and the riskiness of corporate policies. We also link external regulatory shocks that constrain labor mobility to significant drops in corporate risk-taking.
| Original language | English |
|---|---|
| Article number | 102037 |
| Number of pages | 28 |
| Journal | Journal of Corporate Finance |
| Volume | 69 |
| Early online date | 8 Jul 2021 |
| DOIs | |
| Publication status | Published - Aug 2021 |
| MoE publication type | A1 Journal article-refereed |
Keywords
- CEO mobility
- Corporate policy risk
- Shareholder value