This study examines whether the CEO’s facial masculinity—measured by facial width-to-height ratio— can predict the riskiness of his firm’s financial and investment policy. Our sample consists of male CEOs who are covered by the Execucomp and BoardEx databases and who also held an interview with CNBC over the period 1997-2009. Controlling for selection bias, our results suggest that the CEO’s facial widthto-height ratio is positively associated with (i) stock return volatility, (ii) leverage ratio, (iii) the frequency of undertaking acquisitions and (iv) the Vega of the CEO compensation. The positive association remains significant after controlling for the selection bias and overconfidence. Interestingly, this positive association is strengthened after controlling for the likelihood of the CEO having a dangerous hobby. Overall, our findings suggest that a CEO’s personal traits can be a key predictor of the riskiness of corporate financial and investment policy.
Key word: testosterone, risk, CEO, leverage, M&A, fWHR, VEGA
JEL Classification: G02, G32, G34, M1, Z1
학회소식
[2016년 제 4차] The Face of Risk: CEO Testosterone and Risk Taking
작성자 : 관리자
조회수 : 744
게시일 :
2016-12-21
