Do younger CEOs really increase firm risk? Evidence from sudden CEO deaths

Sebastian Trabert

Journal of Corporate Finance, 2023, vol. 79, issue C

Abstract: This study uses sudden deaths of CEOs to provide causal evidence on the relation between CEO age and firm risk. I find that CEO age negatively influences firm risk, measured by stock return volatility, but has no effect on policy choices related to risk taking. These findings contrast prior studies, and suggest that the higher volatility is caused by uncertainty about the younger replacement CEOs' contribution to firm value, rather than changes to risk-related corporate policies.

Keywords: CEO age; CEO effects; Sudden deaths; Firm risk; Risk-taking (search for similar items in EconPapers)
JEL-codes: G31 G32 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:79:y:2023:i:c:s0929119923000160

DOI: 10.1016/j.jcorpfin.2023.102367

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