Military CEOs

Efraim Benmelech and Carola Frydman

Journal of Financial Economics, 2015, vol. 117, issue 1, 43-59

Abstract: There is mounting evidence of the influence of personal characteristics of chief executive officers (CEOs) on corporate outcomes. In this paper we analyze the relation between military service of CEOs and managerial decisions, financial policies, and corporate outcomes. Exploiting exogenous variation in the propensity to serve in the military, we show that military service is associated with conservative corporate policies and ethical behavior. Military CEOs pursue lower corporate investment, are less likely to be involved in corporate fraudulent activity, and perform better during industry downturns. Taken together, our results show that military service has significant explanatory power for managerial decisions and firm outcomes.

Keywords: CEOs; Fraud; Military; Ethics; Corporate Governance (search for similar items in EconPapers)
JEL-codes: G31 G32 J24 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:117:y:2015:i:1:p:43-59

DOI: 10.1016/j.jfineco.2014.04.009

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