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Does the CEO elite education affect firm hedging policies?

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  • Boubaker, Sabri
  • Clark, Ephraim
  • Mefteh-Wali, Salma

Abstract

This paper studies the relationship between CEO elite education and firm hedging decisions. It uses the particular specificities of the French post-secondary educational institutions to examine the effect of CEO educational background on the use of foreign currency derivatives. The results show a positive and significant relationship between education quality and derivatives use. Neither the level nor the type of education has any significant effect. The results also show that the use of derivatives enhances firm performance only when CEOs are from elite institutions. These results are robust to a battery of tests that involve alternative estimation techniques, the use of different subsamples, additional control variables, and control for endogeneity and selection bias.

Suggested Citation

  • Boubaker, Sabri & Clark, Ephraim & Mefteh-Wali, Salma, 2020. "Does the CEO elite education affect firm hedging policies?," The Quarterly Review of Economics and Finance, Elsevier, vol. 77(C), pages 340-354.
    • Handle: RePEc:eee:quaeco:v:77:y:2020:i:c:p:340-354
    DOI: 10.1016/j.qref.2019.11.004
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    More about this item

    Keywords

    CEO elite education; Grandes écoles; Derivatives use; Firm value;
    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
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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