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http://ssrn.com/abstract=1787381
 
 

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Marriage and Managers’ Attitudes to Risk


Nikolai L. Roussanov


University of Pennsylvania - The Wharton School; National Bureau of Economic Research (NBER)

Pavel G. Savor


Fox School of Business - Temple University

December 14, 2013

AFA 2013 San Diego Meetings Paper

Abstract:     
Marital status can both reflect and affect individual preferences. We explore the impact of marriage on corporate CEOs, and find that firms run by single CEOs exhibit higher stock return volatility, pursue more aggressive investment policies, and do not respond to changes in idiosyncratic risk. These effects are weaker for older CEOs. Our findings continue to hold when we use variation in divorce laws across states to instrument for CEO marital status, which supports the hypothesis that marriage itself drives choices rather than it just reflecting innate heterogeneity in preferences. We explore various potential explanations for why single CEOs may be less risk-averse.

Keywords: CEOs, idiosyncratic risk, status concerns

JEL Classification: G02, G30, G32, J12, K36

working papers series


Not Available For Download

Date posted: March 21, 2011 ; Last revised: April 21, 2014

Suggested Citation

Roussanov, Nikolai L. and Savor, Pavel G., Marriage and Managers’ Attitudes to Risk (December 14, 2013). AFA 2013 San Diego Meetings Paper. Available at SSRN: http://ssrn.com/abstract=1787381 or http://dx.doi.org/10.2139/ssrn.1787381

Contact Information

Nikolai L. Roussanov (Contact Author)
University of Pennsylvania - The Wharton School ( email )
3641 Locust Walk
Philadelphia, PA 19104-6365
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Pavel G. Savor
Fox School of Business - Temple University ( email )
Fox School of Business and Management
Philadelphia, PA 19122
United States

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