Does CEO overconfidence affect workplace safety?

Yangyang Chen, Emmanuel Ofosu, Madhu Veeraraghavan and Leon Zolotoy

Journal of Corporate Finance, 2023, vol. 82, issue C

Abstract: We study the impact of CEO overconfidence on workplace safety. We provide robust evidence of a positive relation between CEO overconfidence and workplace injury rates, implying that CEO overconfidence impairs workplace safety. In cross-sectional analysis, we find that the documented effect is amplified among firms with greater concentration of decision rights in headquarters and higher employee turnover, while is mitigated among firms with stronger labor union presence and more effective corporate governance mechanisms. Additional analysis points to increased employee workload and poor corporate safety culture as the mechanisms behind the documented detrimental effect of CEO overconfidence on workplace safety.

Keywords: CEO overconfidence; Workplace safety; Injury rates (search for similar items in EconPapers)
JEL-codes: G30 G41 J28 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:82:y:2023:i:c:s0929119923000792

DOI: 10.1016/j.jcorpfin.2023.102430

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