The Impact of CEO Educational Background on Corporate Risk-Taking in China

Zhang, Jinyi; Xue, Chunxiao; Zhang, Jianing

doi:10.3390/jrfm16010009

Cited by 8 publications

(3 citation statements)

References 48 publications

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“…(Alzugaiby, 2022) argues that higher-ability managers will use a lower-risk strategy to protect their reputation if a risky strategy can lead firms to losses and harm their reputation. (Zhang et al, 2022) find managers with higher intelligence and education tend to avoid risk.…”

Section: Theoretical Reviewmentioning

confidence: 99%

Managerial Ability And Earnings Management: Moderating Role Of Risk-Taking Behavior

Sulhendri,

Simamora,

Nicko Albart

et al. 2024

Jurnal Akuntansi

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Examining how risk-taking behaviour affects managerial skills and earnings management is the goal of this study. The study's sample consists of 846 manufacturing companies listed on the Indonesian Stock Exchange between 2008 and 2018. Data envelopment analysis is a proxy for managerial skill. Accruals and actual earnings management are two aspects of earnings management. The firm fixed-effect regression is used in data analysis. The influence of managerial skills on earnings management is mitigated by risk-taking behaviour. Capable managers are more likely to use their propensity for risk-taking to manipulate earnings. Capable managers respond to earnings volatility resulting from risk-taking by implementing earnings management strategies. This study closes the gap left by earlier research and offers fresh proof of risk-taking behaviour that helps identify situations where managers use their expertise to control profits.

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Section: Theoretical Reviewmentioning

confidence: 99%

Managerial Ability And Earnings Management: Moderating Role Of Risk-Taking Behavior

Sulhendri,

Simamora,

Nicko Albart

et al. 2024

Jurnal Akuntansi

View full text Add to dashboard Cite

show abstract

“…6.12. Nonlinear Quadratic Regression Zhang et al (2023) employed nonlinear quadratic regression to demonstrate a convex correlation between a CEO's educational background and corporate risk-taking. Alfar et al (2023) uncover a nonlinear effect of gender diversity on firm performance in the Palestine Exchange.…”

Section: Alternative Performance Measuresmentioning

confidence: 99%

Board Gender Diversity and Firm Performance: Recent Evidence from Japan

Wang,

Ma,

Xue

et al. 2024

JRFM

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Gender diversity is increasingly recognized as a critical element in corporate management. However, existing research on its impact on firm performance demonstrates inconsistency in a global context. This study employs 1990 publicly listed Japanese companies from 2006 to 2023 and examines the effect of board gender diversity on firm performance in Japan. Findings from the fixed-effects regression model revealed a significant negative impact of board gender diversity on firm performance. This adverse correlation is more pronounced in smaller firms, those with greater leverage and reduced institutional ownership, and regulated and consumer-focused industries, particularly pre-COVID-19. The detrimental impact of board gender diversity on firm performance is transmitted via corporate social responsibility and firm innovation instead of board independence or CEO duality. Notably, the two-stage least squares estimation addresses potential endogeneity, employing an equal opportunity policy as an instrumental variable. Moreover, the robustness of our results is affirmed via the substitution of return on equity for return on assets as an indicator of firm performance. Lastly, our analysis does not reveal a U-shaped nonlinear relationship between board gender diversity and corporate performance. As Japan progressively promotes women’s participation in corporate governance, this research bears significant implications for corporate leaders, investors, and policymakers in Japan.

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“…Therefore, directors are vital in influencing the audit fees. Directors play a role in maintaining the corporate risk (García-Gómez et al , 2023; Zhang et al , 2022) and supervising the business operations (Jizi and Nehme, 2018); therefore, their capacity to operate the business is one of the indicators of the company’s accomplishment of goals. We argue that busy directors can increase audit fees because auditors require more time and resources to evaluate and understand directors’ involvement in the company’s operations.…”

Section: Introductionmentioning

confidence: 99%

Busy CEOs and audit fees: evidence from Indonesia

Harymawan,

Putri,

Ratri

et al. 2023

ARJ

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Purpose A company needs to use auditing procedures to ensure the reliability of financial statements while also providing transparency to stakeholders. The extent of risk associated with the company depends on the directors’ involvement in its daily operations. This paper aims to study the relationship between busy chief executive officers (CEOs) and audit fees. Design/methodology/approach This study uses 1,037 data samples from companies listed on the Indonesia Stock Exchange from 2010 until 2018. It adopts the ordinary least squares method to test the hypothesis. Furthermore, this study performs robustness tests, such as propensity score matching (PSM) and Heckman’s two-stage least square tests (Heckman, 1979), to address the endogeneity issues. Findings This study finds that the appearance of a busy CEO in a company will significantly increase the audit fee. It also concludes that a long tenure of a busy CEO will substantially weaken the positive relationship between the CEO and the audit fee. However, this study discovers that, in a company with a busy CEO, a monitoring mechanism through the independent commissioner and risk management committee will only help to maximize the firm’s practical risk evaluation a little. This result is robust because the PSM and Heckman tests display consistent results, so it is free from endogeneity issues. Practical implications This study is valuable for theoretical and practical development in Indonesia. Due to the minimum regulation about multiple positions on boards in Indonesia, the shareholders must be aware of the need to choose a board with more skill and commitment to improve the position of the company. This result also warns the C-level of the company to pay more attention to its risk-monitoring process to make it more effective and efficient. Originality/value Indonesia is one of the countries that have implemented the two-tier governance system. With the minimum regulation about multiple directorships in Indonesia, this study offers new insights into how a busy CEO will be related to the audit outcomes.

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The Impact of CEO Educational Background on Corporate Risk-Taking in China

Cited by 8 publications

References 48 publications

Managerial Ability And Earnings Management: Moderating Role Of Risk-Taking Behavior

Managerial Ability And Earnings Management: Moderating Role Of Risk-Taking Behavior

Board Gender Diversity and Firm Performance: Recent Evidence from Japan

Busy CEOs and audit fees: evidence from Indonesia

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