Managerial Career Concerns and Risk Management
Jun Wang and
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Jouahn Nam: Pace University
Jun Wang: Baruch College
Ge Zhang: University of New Orleans
No 2005-10, Working Papers from University of New Orleans, Department of Economics and Finance
We present a dynamic model of corporate risk management and managerial career concerns. We show that managers with high (low) career concerns are more likely to speculate (hedge) early in their careers. In the later stage of their careers when managers have less career concerns, there is no speculative motive for self interested managers. On the other hand, managers with minimal career concerns engage in neither hedging nor speculation early in their careers, but they may choose to hedge after poor early performance.
Keywords: Risk management; Dynamic model; Hedging; Speculation (search for similar items in EconPapers)
JEL-codes: G34 C73 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-fin, nep-fmk and nep-rmg
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Persistent link: https://EconPapers.repec.org/RePEc:uno:wpaper:2005-10
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