It's not so bad: Director bankruptcy experience and corporate risk-taking *

• 成果类型: Article
• 署名作者: Gopalan, Radhakrishnan; Gormley, Todd A.; Kalda, Ankit
• 署名单位: Washington University (WUSTL); Indiana University System; Indiana University Bloomington; IU Kelley School of Business
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.04.037
• 发表日期: 2021
• 页码: 261-292
• 关键词: DIRECTORS; bankruptcy; RISK; experience; beliefs

摘要

We show that firms take more (but not necessarily excessive) risks when one of their di-rectors experiences a corporate bankruptcy at another firm where they concurrently serve as a director. This increase in risk-taking is concentrated among firms where the director experiences a shorter, less-costly bankruptcy and where the affected director likely exerts greater influence and serves in an advisory role. The findings show that individual direc-tors, not just CEOs, can influence a wide range of corporate outcomes. The findings also suggest that individuals actively learn from their experiences and that directors tend to lower their estimate of distress costs after participating in a bankruptcy firsthand. (c) 2021 Elsevier B.V. All rights reserved.