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It takes two to tango: Spousal risk preferences and CEO risk-taking behavior

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  • Antoniou, Constantinos
  • Cuculiza, Carina
  • Kumar, Alok
  • Yang, Lizhengbo

Abstract

Using hand-collected data on the cultural origins of S&P 500 CEOs and their spouses, we examine whether differences in risk attitudes within marriages influence corporate risk-taking behavior. We find that CEOs with more risk averse spouses adopt relatively safer corporate policies. The effect is stronger if the CEO comes from a more collectivist culture, has been married more recently, or shares more responsibilities with their spouse. Together, these findings suggest that the cultural composition of CEOs’ households and their spouses’ risk preference affect corporate risk-taking behavior.

Suggested Citation

  • Antoniou, Constantinos & Cuculiza, Carina & Kumar, Alok & Yang, Lizhengbo, 2024. "It takes two to tango: Spousal risk preferences and CEO risk-taking behavior," Journal of Corporate Finance, Elsevier, vol. 86(C).
    • Handle: RePEc:eee:corfin:v:86:y:2024:i:c:s0929119924000464
    DOI: 10.1016/j.jcorpfin.2024.102584
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    More about this item

    Keywords

    Cultural norms; Corporate risk-taking; Spousal risk preferences; Collectivism; Household finance;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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