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Generation effects and managerial risk taking

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  • Yeoh, Siew-Boey
  • Hooy, Chee-Wooi

Abstract

This study examines the generation effects on managerial risk-taking by decomposing between-generation variation and within-generation variation. Using 6,169 firm-year observations in Malaysia data from 2009 to 2017, for the between-generation effect, we find that Pre-War II and Pre-Independence CEOs undertake lower levels of risk-taking while Post-Independence and Development-Era CEOs undertake higher levels of risk-taking. For the within-generation effect, we find that CEOs who have experienced the traumatic event during their impressionable year are relatively risk averse, which implies that among Pre-War II, Pre-Independence and Post-Independence CEOs, those who were pre-adulthood at the time of the event will be the most risk adverse. The cumulative impression, however, only significantly affects the Pre-War II CEOs because the layers of history may erode the traces of older time periods, while more recent cohort of CEOs have fewer new layers that can attenuate the strength of imprints over time; hence, significant effects were not observed.

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  • Yeoh, Siew-Boey & Hooy, Chee-Wooi, 2022. "Generation effects and managerial risk taking," Journal of Business Research, Elsevier, vol. 139(C), pages 918-934.
    • Handle: RePEc:eee:jbrese:v:139:y:2022:i:c:p:918-934
    DOI: 10.1016/j.jbusres.2021.09.063
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