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1 – 10 of over 156000Research has focused primarily on the antecedents that influence the risk taking of CEOs themselves. This study examines how an important event experienced by a CEO at a direct…
Abstract
Purpose
Research has focused primarily on the antecedents that influence the risk taking of CEOs themselves. This study examines how an important event experienced by a CEO at a direct rival firm influences a CEO's risk-taking. It also examines how prior firm performance relative to aspirations moderates the relationship.
Design/methodology/approach
In order to test the hypothesis, the authors perform an a difference-in-differences methodology.
Findings
Using a difference-in-differences methodology, we find that when a CEO wins a prestigious CEO award, competitor CEOs increase their firm risk-taking in the post-award period. The proclivity becomes stronger when their prior firm performance relative to aspirations is better. These findings suggest that a CEO winning a prominent CEO award influences competitor CEOs' risk-taking.
Originality/value
This study contributes to the literature on managerial risk-taking by highlighting that a star CEO winning a prominent award may serve as a striving aspiration and induce competitor CEOs to take risks, and that two different types of aspirations – striving and competitive aspirations – interact to influence the competitor CEOs' risk-taking.
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Previous research has mainly focused on the outcomes of empowering leadership, and empirical evidence on how to encourage leaders to display empowering behaviors has been…
Abstract
Purpose
Previous research has mainly focused on the outcomes of empowering leadership, and empirical evidence on how to encourage leaders to display empowering behaviors has been overlooked, particularly from an interpersonal perspective.
Design/methodology/approach
Based on the integrative model of organizational trust, we investigate the relationship between employees' taking charge behaviors and empowering leadership considering the mediating role of leader trust in employees and the moderating role of risk propensity.
Findings
The results indicate that taking charge is positively associated with leader trust in employees, which influences the development of empowering leadership. Additionally, leaders' risk propensity moderates these relationships, that is, a higher level of risk propensity can enhance the promoting effect of leader trust on empowering behaviors.
Originality/value
This study explores the antecedents and mechanisms influencing empowering leadership and proposes the moderating effect of risk propensity. The findings not only clarify how and why employees' taking charge behaviors can stimulate empowering leadership but also offer a more comprehensive understanding of the antecedents of empowering leadership.
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Zhihao Qin, Menglin Cui, Jiaqi Yan and Jie Niu
This paper aims to examine whether managerial sentiment, extracted from annual reports, is associated with corporate risk-taking in the context of Chinese companies. This study…
Abstract
Purpose
This paper aims to examine whether managerial sentiment, extracted from annual reports, is associated with corporate risk-taking in the context of Chinese companies. This study expands the vein of literature on overconfidence theory.
Design/methodology/approach
By leveraging textual analysis on Chinese listed companies’ annual reports, the authors construct firm-level managerial sentiment during 2007 and 2021 to examine how managerial sentiment influences corporate risk-taking after control for firm characteristics. Corporate risk-taking is denoted by corporate investment engagements: capital expenditures and net fixed asset investment.
Findings
Results show that incentives for corporate risk-taking are likely to increase with the positive managerial sentiment and decrease with the negative sentiment in companies’ annual reports. Positive managerial sentiment is associated with over-/under-investment and low/high investment efficiency. Further additional tests show that the managerial sentiment effect only holds during low economic uncertain years and samples of private-owned firms. Furthermore, the robust tests indicate that there is no endogenous issue between managerial sentiment and corporate risk-taking.
Research limitations/implications
Annual report textual-based managerial sentiment may not perfectly reflect managers’ lower frequency sentiment (e.g. weekly, monthly and quarterly sentiment). Future studies could attempt to capture managers’ on-time sentiment by using media sources and corporate disclosures.
Practical implications
To the best of the authors’ knowledge, this paper is the first research to provide insights into supervising managers’ corporate decisions by observing their textual information usage in corporate disclosure. Moreover, the approach of measuring managerial sentiment might be a solution to monitoring managerial class.
Originality/value
This paper contributes to the literature on accounting and finance studies, adding another piece of empirical evidence on content analysis by examining a unique language and institutional context (i.e. China). Besides, the paper notes that in line with the English version disclosure, based on Chinese semantic words, managerial sentiment in the Chinese-speaking world has magnitude on corporate decisions. The research provides insights into supervising managers’ corporate decisions by observing their textual information usage in corporate disclosure. Moreover, the approach to measuring managerial sentiment may be a practical solution to monitoring managerial class.
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Lianne Jones, Rachelle Rogers, Doug Rogers, Austin McClinton and Lisa Painter
The ever-changing educational landscape, exacerbated by recent events surrounding COVID, political and cultural unrest, necessitates educators who are antifragile, able to…
Abstract
Purpose
The ever-changing educational landscape, exacerbated by recent events surrounding COVID, political and cultural unrest, necessitates educators who are antifragile, able to withstand pressures and thrive amidst uncertainty. To this end, the pilot study reported here aims to examine mathematics educators’ initial reflections on what it means to be a risk-taker in the classroom, what prevents them from engaging in instructional risks and what would support their instructional risk-taking.
Design/methodology/approach
The pilot study utilized interviews with participants, including four pre-service teachers who were enrolled at the university and seven in-service teachers who were employed on active PDS campuses within the school district.
Findings
Preliminary findings suggest teacher beliefs concerning risk-taking, the barriers to engaging in such behaviors and the support needed to be able to take instructional risks. Results highlight the role of school–university partnerships in cultivating a culture of risk-taking through active collaboration and dialogue.
Research limitations/implications
These findings have important implications for universities and PDS partners engaged in preparing teachers for an educational field that is unpredictable and continually changing. Additional research should be completed in varying PDS settings.
Practical implications
Findings highlight the role of school–university partnerships in cultivating a culture of risk-taking through active collaboration and dialogue.
Originality/value
Educators are currently faced with an unprecedented instructional landscape. Antifragile, risk-taking teachers are needed who are adaptable and innovative, thus better equipped to enter the challenging and uncertain realities of education.
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Çağrı Hamurcu, Hayriye Dilek Yalvac Hamurcu and Merve Karakuş
This study aimed to examine the financial risk-taking behaviors of adult individuals diagnosed with attention deficit hyperactivity disorder (ADHD).
Abstract
Purpose
This study aimed to examine the financial risk-taking behaviors of adult individuals diagnosed with attention deficit hyperactivity disorder (ADHD).
Design/methodology/approach
The study was conducted with adults (n = 80) diagnosed with ADHD and healthy controls (n = 80). In order to measure risk-taking in the financial domain, the items in the investment and gambling sub-dimensions of the Domain-Specific Risk-Taking Scale (DOSPERT) were applied.
Findings
Adults with ADHD had higher investment and gambling risk-taking and expected benefits scores than the control group, and there was no difference between the two groups in terms of risk perceptions. In the regression analysis, there was a positive linear relationship between the investment and gambling risk-taking scores and the expected benefits scores in both groups. There was a negative linear relationship between investment risk-taking and risk perceptions scores only in the control group.
Originality/value
In terms of investment and gambling, both risk-taking and expected benefits are greater in individuals with ADHD. It has been observed that while healthy individuals take investment risks, they evaluate according to the expected benefits and risk perceptions, while individuals with ADHD make evaluations only according to the expected benefits, risk perceptions do not predict financial risk-taking in individuals with ADHD. When it comes to risk-taking related to gambling, both groups take risks only according to their expectations of benefits, not their perceptions of risk. The study provides outputs that can contribute to the literature in terms of the effects of ADHD diagnosis on financial decision-making processes in the context of risk-taking.
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Ana Junça-Silva, Henrique Duarte and Susana C. Santos
Discovering opportunities is a key entrepreneurship competence for those who want to start their own business and who choose to enter the workforce. In this study, the authors…
Abstract
Purpose
Discovering opportunities is a key entrepreneurship competence for those who want to start their own business and who choose to enter the workforce. In this study, the authors focus on the antecedents of the ability to discover entrepreneurial opportunities by uncovering how and when students' personal initiative (Frese and Fay, 2001) leads to an increase in this key competency. The purpose of this study was to examine the role of risk-taking and creativity in the interplay between personal initiative and opportunity discovery competencies among university students.
Design/methodology/approach
Data were collected with a self-assessment tool in two moments in time, using a sample of 103 university students from Portugal enrolled in an entrepreneurship course. The authors measured personal initiative and entrepreneurial risk-taking at the beginning of the entrepreneurship course (Time 1). Two months later (Time 2), by the end of an entrepreneurship course, the authors measured creativity and opportunity discovery abilities.
Findings
The results of this study showed that risk-taking mediates the effect of personal initiative on opportunity discovery and that creativity interacts with risk-taking and opportunity discovery. Specifically, the authors found that the relationship between entrepreneurial risk-taking and opportunity discovery is positive and statistically significant when students display average or above-average creativity. The indirect effect of the personal initiative on opportunity discovery through entrepreneurial risk-taking seems to increase when the student's creativity increases, as the index of moderated mediation is positive.
Research limitations/implications
As with all studies, there are limitations to work of this study. First, data of this study is restricted to a sample of students from Portugal. As such, the authors should be careful about generalizations concerning students from other cultural settings; entrepreneurship competencies can differ across countries. Second, the findings of the present study are based on students’ self-reports regarding their own entrepreneurship competencies.
Originality/value
This work can inspire entrepreneurship educators to look at the entrepreneurship competencies models holistically and inspire future work to explore the relationship patterns between entrepreneurial competencies.
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Ali Amin, Rizwan Ali, Ramiz Ur Rehman and Collins G. Ntim
This study aims to examine the impact of chief executive officers’ (CEOs’) personal characteristics on firms’ risk taking and the moderating role of family ownership on this…
Abstract
Purpose
This study aims to examine the impact of chief executive officers’ (CEOs’) personal characteristics on firms’ risk taking and the moderating role of family ownership on this relationship.
Design/methodology/approach
This study used 2,647 firm-year observations of non-financial firms listed on Pakistan Stock Exchange over the period 2013–2021. To test the hypotheses, the authors used ordinary least squares regression and, to resolve the possible endogeneity problem, the authors used system generalized method of moments technique.
Findings
Drawing insights first from upper echelons theory, the authors report that CEOs with business, economics, finance and/or management educational background and female CEOs reduce firms’ risk-taking behaviour. Further, using insights from social and organizational identity theoretical perspectives, the results indicate that due to strong family affiliation and organizational identity, family owners exhibit risk aversion behaviour and moderate this relationship.
Originality/value
This study provides novel evidence of risk averse behaviour of CEOs with business, economics, finance and/or management educational background and female CEOs along with moderating impact of family ownership on this relationship in an emerging economy. Overall, the results extend empirical support for upper echelons and social identity theories in an emerging market context.
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Tanzina Akhter, Zairihan Abdul Halim, Saima Mehzabin, Ahanaf Shahriar and Md. Abul Kalam Azad
The global financial crisis of 2008 has put greater doubt on the bank risk-management effectiveness around the world. As a part of the response to such doubt, the Gulf Cooperation…
Abstract
Purpose
The global financial crisis of 2008 has put greater doubt on the bank risk-management effectiveness around the world. As a part of the response to such doubt, the Gulf Cooperation Council (GCC) region is formulating some feasible approaches to manage bank risk. In this regard, an understanding of the role of the region’s culture and economic freedom will provide immense input into this risk management approach. This study examines the impact of national culture and economic freedom on bank risk-taking behavior.
Design/methodology/approach
Data on bank risk measures, culture and economic freedom are obtained from the FitchConnect, World Bank database, Hofstede’s insights and Heritage Foundation. Generalized least squares and two step-system generalized method of moments are then used to examine the risk-taking behavior of the region.
Findings
Banks of the GCC region operating in the low power distance, high collectivism, masculine and low uncertainty avoidance cultures are susceptible to assuming more operational and insolvency risks. Furthermore, banks’ overall risk-taking inclination is positively increased once the region has considerable business and monetary freedom.
Practical implications
The governments and bank regulatory bodies may benefit from the study findings by developing the best economic freedom index and national culture that enriches risk management practices and curves excessive risk-taking inclination.
Originality/value
To the best of the authors’ knowledge, this study is the first attempt to address the interplay among culture, economic freedom and bank risk to ensure constructive risk-taking behavior for the GCC banking industry.
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This study aims to investigate the relationship between boardroom gender diversity (BoGD) and risk-taking by property-liability (P-L) stock insurers from an analytical framework…
Abstract
Purpose
This study aims to investigate the relationship between boardroom gender diversity (BoGD) and risk-taking by property-liability (P-L) stock insurers from an analytical framework that control for organizational form and ownership structure. It relies on the behavioral agency model, the resource dependency theory and the concept of socioemotional wealth (SEW).
Design/methodology/approach
This study builds on an unbalanced panel of 2,285 firm-year observations from 232 European and US P-L stock insurers covering the period 2010–2019 and measure risk-taking by using four proxies: total risk (TR), upside risk (UpR), downside risk (DwR) and default risk (DR). Reverse causality and endogeneity concerns are treated by applying different approaches.
Findings
Findings suggest that BoGD mitigates the TR, DwR and DR but does not interfere with the UpR, which conceptualizes firm expectations to enhance patrimony and safeguard SEW for heirs, especially in family-owned insurers. The findings hold in various robustness checks including endogeneity and alternative specifications of BoGD and risk-taking.
Practical implications
This study contributes to practice by contrasting the role of female directors’ bevahior when assuming risk, which seems significantly different depending on the risk-taking specification and the organizational form. The author advises policyholders and policymakers to look at closely on BoGD and ownership structure as they affect insurance company risk-taking.
Originality/value
This study takes a more direct approach to highlight the BoGD’s effect on corporate risk-taking by focusing on the insurance sector which is characterized by risk and uncertainty bearing. To the best of the author’s knowledge, this is the first study to consider the full range of the stock organizational forms and the degree of family control in displaying this effect in both widely traded and closely traded insurers and to assess risk-taking from both market-based and accounting-based aspects.
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Conrado Diego García-Gómez, Marina Zavertiaeva and Félix J. López Iturriaga
This paper aims to study the impact of CEOs’ personality and social connections on corporate risk-taking in the Russian market.
Abstract
Purpose
This paper aims to study the impact of CEOs’ personality and social connections on corporate risk-taking in the Russian market.
Design/methodology/approach
Using a sample of 93 large listed Russian corporations between 2008 and 2016, this study tests a range of personal traits, including the classical personal characteristics like age and tenure, some country-specific traits such as connections and military experience, as well as other human and social capital characteristics.
Findings
This study finds non-linear relationships between corporate risk-taking and CEO age and tenure. This study also finds that firms run by CEOs with military experience take more corporate risk. On the CEOs’ social capital side, this study’s results suggest that both political and educational connections are positively related to corporate risk-taking.
Originality/value
This study also tests some traits that have usually been ignored by the literature, such as marital and family status.
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