재무연구 제 권 호 (2015년 11월)
Asian Review of Financial Research, Vol., No..
pp.636~694
pp.636~694
The Testosterone of the CEO and the Risk of the Firm
Y. Han (Andy) Kim Assistant Professor of Finance, Nanyang Business School, Nanyang Busness School, Nanyang Business School, Nanyang Avenue, Singapore
Shinichi Kamiya Assistant professor of Finance, Nanyang Business School, Nanyang Technological University, Nanyang Avenue, Singapore
Testosterone is a steroid hormone that affects male to aggressively take risks to achieve dominant status. We examine whether CEOs with higher testosterone level make the firms riskier. Since the facial width-to-height ratio (fWHR) of a male adult is determined by his pubertal testosterone exposure, we measure the fWHR male CEOs in both Execucomp and BoardEx that had CNBC interviews during 1997~2009. Controlling for sample selection bias, CEO’s preference for risky hobbies, and overconfidence, we find that high testosterone CEOs (1) increase firm risk; (2) maintain high leverage ratio; (3) are more acquisitive; and (4) receive high VEGA compensation.
Y. Han (Andy) Kim
Shinichi Kamiya
Testosterone is a steroid hormone that affects male to aggressively take risks to achieve dominant status. We examine whether CEOs with higher testosterone level make the firms riskier. Since the facial width-to-height ratio (fWHR) of a male adult is determined by his pubertal testosterone exposure, we measure the fWHR male CEOs in both Execucomp and BoardEx that had CNBC interviews during 1997~2009. Controlling for sample selection bias, CEO’s preference for risky hobbies, and overconfidence, we find that high testosterone CEOs (1) increase firm risk; (2) maintain high leverage ratio; (3) are more acquisitive; and (4) receive high VEGA compensation.
