Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 20, 2013 erstellt
Beschreibung:
This research studies the role of CEOs with a career background in finance. Firms that appoint financial expert CEOs hold less cash and more debt, and engage in more share repurchases. Financial expert CEOs are also more financially sophisticated. They are less likely to use one companywide discount rate instead of a project-specific one. They also manage financial policies more actively, communicate better with financial markets and their firm investments are less sensitive to firm cash flows. We use exogenous changes to business conditions and find financial expert CEOs are able to raise external funds even when credit conditions are tight. They were also more responsive to the dividend and capital gains tax cuts in 2003 and paid out more to shareholders. Newly appointed financial expert CEOs also seem more likely to replace incumbent CFOs. We do not find evidence that personal networks are driving these results. Finally, we analyze CEO-firm matching based on financial experience and provide evidence that is mostly consistent with a conclusion that employment histories of CEOs greatly matter for corporate policies