Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments March 20, 2015 erstellt
Beschreibung:
We investigate whether CEOs' experiences of macroeconomic boom affect risk taking. We use the unique setting of economic conditions changed from Central Planning to Market Economy in China, which is an exogenous shock to early-life experience, as a natural experiment to test the impact on CEOs' risk preference. To establish causality, we identify two extraordinary events of China that are likely to be early-life experiences and career experiences of CEOs: Growth-up in the reform and open-up era, Original-and-persistent in business circles. Through these experiences, CEOs' risk tolerance can be formed and lead to attitude changes in risk taking. First, we document that RO-CEOs, who experienced the Reform and Open-up in early adulthood tend to have higher likelihood of risk taking and more risk preference than CP-CEOs, who were grow-up in central planning era experienced economic recessions. Second, we examine whether growth experiences affect achievement of risk taking are dependent on the career experience over the course of profession. We find that RO-CEOs achieve greater risk-related performance only in OP-CEOs, who are original and persistent in business circle. Furthermore, our findings imply that there are significant career experience fixed effects in performance and these effects are significantly through the channel of risk taking in various ways