Managerial myopia and the mortgage meltdown

• 成果类型: Article
• 署名作者: Kolasinski, Adam C.; Yang, Nan
• 署名单位: Texas A&M University System; Texas A&M University College Station; Mays Business School; Hong Kong Polytechnic University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2017.03.010
• 发表日期: 2018
• 页码: 466-485
• 关键词: FINANCIAL CRISIS; Subprime mortgages; financial fraud; ceo incentives; ceo pay

摘要

Prominent policy makers assert that managerial short-termism was at the root of the sub-prime crisis of 2007-2009. Prior scholarly research, however, largely rejects this assertion. Using a more comprehensive measure of Chief Executive Officer (CEO) incentives for short-termism, we uncover evidence that short-termism indeed played a role. Firms whose CEOs were contractually allowed to sell or exercise more of their stock and options holdings sooner had more subprime exposure, a higher probability of financial distress, and lower risk-adjusted stock returns during the crisis, as well as higher fines and settlements for subprime-related fraud. (C) 2018 Published by Elsevier B.V.