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CEO age and risk-taking of family business in Malaysia: The inverse S-curve relationship

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  • Siew-Boey Yeoh

    (Universiti Sains Malaysia)

  • Chee-Wooi Hooy

    (Universiti Sains Malaysia)

Abstract

The relationship between CEO age and corporate risk-taking has remained inconclusive after decades of research. This study contends that CEO may have different risk-taking propensities at different age stages and the relationship could be better captured by nonlinear function. Using a large sample of 6169 firm-year observations of public listed companies in Malaysia, we study the risk-taking behaviour of CEO for the period of 2009 to 2017. We find that CEO age has an inverse U-shaped relationship, such that risk-taking increases with CEO age but reduces beyond certain age threshold. Besides, drawing on socioemotional wealth perspective, we further examine the moderating effect of family CEO. We find that near-retirement family CEO reverses the conservative behaviour at old age and results an inverse S-curved relationship. Findings of this paper yields implication for family business and policymakers seeking to encourage risk-taking behaviour in emerging countries.

Suggested Citation

  • Siew-Boey Yeoh & Chee-Wooi Hooy, 2022. "CEO age and risk-taking of family business in Malaysia: The inverse S-curve relationship," Asia Pacific Journal of Management, Springer, vol. 39(1), pages 273-293, March.
    • Handle: RePEc:kap:asiapa:v:39:y:2022:i:1:d:10.1007_s10490-020-09725-x
    DOI: 10.1007/s10490-020-09725-x
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