CEO Investment Cycles

• 成果类型: Article
• 署名作者: Pan, Yihui; Wang, Tracy Yue; Weisbach, Michael S.
• 署名单位: Utah System of Higher Education; University of Utah; University of Minnesota System; University of Minnesota Twin Cities
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhw033
• 发表日期: 2016
• 页码: 2955
• 关键词: CORPORATE GOVERNANCE; AGENCY COSTS; firm; performance; determinants; Managers; style

摘要

This paper documents the existence of a CEO investment cycle, in which disinvestment decreases over a CEO's tenure, while investment increases, leading to cyclical firm growth in assets and employment. The estimated variation in investment rate over the CEO investment cycle is of the same order of magnitude as the differences caused by business cycles or financial constraints. Results from a number of tests generally support the view that the investment cycle is caused by agency problems, leading to increasing investment quantity and decreasing investment quality over time as the CEO gains more control over his board.