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Managerial attitudes and corporate actions

Author

Listed:
  • Graham, John R.
  • Harvey, Campbell R.
  • Puri, Manju

Abstract

We administer psychometric tests to senior executives to obtain evidence on their underlying psychological traits and attitudes. We find US CEOs differ significantly from non-US CEOs in terms of their underlying attitudes. In addition, we find that CEOs are significantly more optimistic and risk-tolerant than the lay population. We provide evidence that CEOs' behavioral traits such as optimism and managerial risk-aversion are related to corporate financial policies. Further, we provide new empirical evidence that CEO traits such as risk-aversion and time preference are related to their compensation.

Suggested Citation

  • Graham, John R. & Harvey, Campbell R. & Puri, Manju, 2013. "Managerial attitudes and corporate actions," Journal of Financial Economics, Elsevier, vol. 109(1), pages 103-121.
    • Handle: RePEc:eee:jfinec:v:109:y:2013:i:1:p:103-121
    DOI: 10.1016/j.jfineco.2013.01.010
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    More about this item

    Keywords

    Managers; Attitudes; Personality traits; Risk-aversion; Capital structure; Debt; Acquisitions; Corporate policies; Behavioral corporate finance;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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