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Do Managerial Motives Influence Firm Risk Reduction Strategies?

Do Managerial Motives Influence Firm Risk Reduction Strategies? ABSTRACT This article finds evidence consistent with the hypothesis that managers consider personal risk when making decisions that affect firm risk. I find that Chief Executive Officers (CEOs) with more personal wealth vested in firm equity tend to diversify. CEOs who are specialists at the existing technology tend to buy similar technologies. When specialists have many years vested, they tend to diversify, however. Poor performance in the existing lines of business is associated with movements into new lines of business. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Finance Wiley

Do Managerial Motives Influence Firm Risk Reduction Strategies?

The Journal of Finance , Volume 50 (4) – Sep 1, 1995

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References (20)

Publisher
Wiley
Copyright
1995 The American Finance Association
ISSN
0022-1082
eISSN
1540-6261
DOI
10.1111/j.1540-6261.1995.tb04059.x
Publisher site
See Article on Publisher Site

Abstract

ABSTRACT This article finds evidence consistent with the hypothesis that managers consider personal risk when making decisions that affect firm risk. I find that Chief Executive Officers (CEOs) with more personal wealth vested in firm equity tend to diversify. CEOs who are specialists at the existing technology tend to buy similar technologies. When specialists have many years vested, they tend to diversify, however. Poor performance in the existing lines of business is associated with movements into new lines of business.

Journal

The Journal of FinanceWiley

Published: Sep 1, 1995

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