 The impact of rookie CEOs on corporate risk-takingLinfei Zhong and Yuanqiong He International Review of Financial Analysis, 2025, vol. 107, issue C Abstract: Herein, 42,517 firm-year observations spanning 2000–2023 from A-share listed Chinese companies were examined concerning the effect of rookie CEOs on corporate risk-taking and its underlying mechanisms. Notably, rookie CEOs remarkably increased corporate risk-taking, and they remain valid while using alternative measures and propensity score matching. The key regression coefficient was β = 0.005 on Risktaking1. Mechanism analysis also indicated that rookie CEOs promote higher risk-taking by enhancing firm agility and strengthening managerial power. Furthermore, heterogeneity tests show a stronger effect in firms that lack political connections, have overconfident management, and possess a lower share of male executives. This study reported the role of rookie CEOs in strategic decision-making and offered policy implications for corporate governance. Boards of directors should set ex-ante risk constraints during the initial 3 years of CEO tenure to balance high-risk strategies with the requirement for long-term sustainable growth. Keywords: Rookie CEO; Corporate risk-taking; Corporate governance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:107:y:2025:i:c:s105752192500746x DOI: 10.1016/j.irfa.2025.104659 Access Statistics for this article International Review of Financial Analysis is currently edited by B.M. Lucey More articles in International Review of Financial Analysis from Elsevier |
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