CEO traders and corporate acquisitions
Jeffrey Tse and
P. Joakim Westerholm ()
Journal of Corporate Finance, 2019, vol. 54, issue C, 107-127
This paper investigates whether the personal trading decisions of CEOs are related to their corporate acquisition decisions. We find that the personal trading performance of CEOs across all stocks they trade is significantly and positively related to the short-term performance of their mergers, and that CEOs exhibiting greater turnover on their personal common equity portfolios undertake acquisitions more frequently. Hence, a CEO's risk aversion, confidence and capability are consistent across their personal and corporate investment decisions.
Keywords: CEO; Acquisitions; Behavioral consistency theory (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:54:y:2019:i:c:p:107-127
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