CEO mobility and corporate policy risk

Timo Korkeamäki, Gonul Colak

Research output: Contribution to journalArticleScientificpeer-review

1 Citation (Scopus)
13 Downloads (Pure)

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 languageEnglish
Article number102037
Number of pages28
JournalJOURNAL OF CORPORATE FINANCE
Volume69
Early online date8 Jul 2021
DOIs
Publication statusPublished - Aug 2021
MoE publication typeA1 Journal article-refereed

Keywords

  • CEO mobility
  • Corporate policy risk
  • Shareholder value

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