Work

Status, Marriage, and Managers' Attitudes To Risk

Year: 2012

Type: report

Abstract: Status concerns can drive risk-taking behavior by affecting the payoff to a marginal dollar of wealth.If status concerns arise endogenously due to competition in the marriage market, then unmarried individuals should take greater risks.We test this hypothesis by studying corporate CEOs.We find that single CEOs are associated with firms exhibiting higher stock return volatility, pursue more aggressive investment policies, and are not affected by increases in idiosyncratic risk.These effects are weaker for older CEOs.Our results also hold when we use variation in divorce laws across states to instrument for CEO marital status.

Source: National Bureau of Economic Research

DOI: 10.3386/w17904

Authors: Nikolai Roussanov, Pavel Savor

Institutions: University of Southern California, National Bureau of Economic Research, University of Pennsylvania, University of California, Berkeley

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2767137398

Cites: 59

Cited by: 21

Related to: 10