Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 13, 2023 erstellt
Description:
In this paper, we examine how CEOs with government work experience (GWE) affect firms’ regulatory violations. We find firms that have CEOs with GWE are less likely to have regulatory violations. We adopt both an instrumental variable and a difference-in-differences approach to address the endogenous nature of CEO selection and document results consistent with our initial findings. Further analysis suggests that GWE can reduce the probability of violation commission while increasing the probability of violation detection, consistent with GWE providing CEOs with regulation-related knowledge that can improve compliance. We show that GWE is valuable to shareholders as it mitigates the negative impact of regulatory violations on stock returns. CEOs with GWE generally have longer tenure and less turnover. In addition, GWE is especially valued by firms with prior violations, which reward GWE CEOs with higher pay