CEO mobility and corporate policy risk

Gönül Çolak and Timo Korkeamäki

Journal of Corporate Finance, 2021, vol. 69, issue C

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.

Keywords: CEO mobility; Corporate policy risk; Shareholder value (search for similar items in EconPapers)
JEL-codes: G31 G32 J33 J60 J62 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:69:y:2021:i:c:s0929119921001590

DOI: 10.1016/j.jcorpfin.2021.102037

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