Duong, Kiet Tuan and Banti, Chiara and Instefjord, Norvald (2021) Managerial conservatism and corporate policies. Journal of Corporate Finance, 68. p. 101973. DOI https://doi.org/10.1016/j.jcorpfin.2021.101973
Duong, Kiet Tuan and Banti, Chiara and Instefjord, Norvald (2021) Managerial conservatism and corporate policies. Journal of Corporate Finance, 68. p. 101973. DOI https://doi.org/10.1016/j.jcorpfin.2021.101973
Duong, Kiet Tuan and Banti, Chiara and Instefjord, Norvald (2021) Managerial conservatism and corporate policies. Journal of Corporate Finance, 68. p. 101973. DOI https://doi.org/10.1016/j.jcorpfin.2021.101973
Abstract
This paper investigates how conservative managers make corporate decisions. Motivated by psychology research, we use handwritten signatures (i.e., emotionally restraint disclosure styles) as a proxy for CEO conservatism. We find that firms with conservative CEOs engage more with safer investments (capital expenditures), engage less with risky policies (Research & Development expenses and debt financing), hold more cash, are less likely to pay cash dividends, and more likely to use stock repurchase schemes. We use the same proxy for CFO conservatism. We find that CFO conservatism is a better determinant than CEO conservatism for cash holding and financing policies, but the reverse is true for investment policies. Conservative CFOs prefer long-term debt to short-term debt.
Item Type: | Article |
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Uncontrolled Keywords: | CEO conservatism; CFO conservatism; Corporate policies; Signature style |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Essex Business School |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 26 Apr 2021 11:52 |
Last Modified: | 30 Oct 2024 16:35 |
URI: | http://repository.essex.ac.uk/id/eprint/30230 |
Available files
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Licence: Creative Commons: Attribution-Noncommercial-No Derivative Works 3.0