[Research Seminar 2018.06.07]CEO Lifetime Work Experiences

2018년도 6월 3차 연구세미나 공지 (Notice of Research Seminar 3, June)
2018년 6월 5일
2018년도 6월 4차 연구세미나 공지 (Notice of Research Seminar 4, June)
2018년 6월 15일

[Research Seminar 2018.06.07]CEO Lifetime Work Experiences

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Abstract:

Corporate America managers are heterogenous with respect to their experiences, skill sets, and management styles. In this study, we explore CEO lifetime experiences to explain stock price crash risk. Following methodology by Custodio, Ferreira, and Matos (2013), our results show that those CEOs with diverse backgrounds from multiple industries is negatively associated with stock price crash risk. CEOs with general background are less incentivized to hoard negative information than those CEOs with limited work experience from a single industry (or limited number of industries). CEOs’ diverse backgrounds is catalyst for transparent information because they have a higher re-employment opportunity than those CEOs with limited experience in case of removal from the current position. We address endogeneity problem with firm fixed effects model, instrument variable approach, and propensity matching, and the results largely remain the same.

JEL Classification: G21, G32

Keywords: Stock price crash risk; CEOs; Information hoarding; Third moment