43 Pages Posted: 11 Jul 2009 Last revised: 28 May 2012
Date Written: May 22, 2012
We administer psychometric tests to senior executives to obtain evidence on their underlying psychological traits and attitudes. We find U.S. CEOs differ significantly from non-U.S. CEOs in terms of their underlying attitudes. In addition, we find that CEOs are significantly more optimistic and risk-tolerant than the lay population. We provide evidence that CEO’s behavioral traits such as optimism and managerial risk-aversion are related to corporate financial policies. Further, we provide new empirical evidence that CEO traits such as risk aversion and time preference are related to their compensation.
Keywords: Managers, attitudes, personality traits, risk aversion, capital structure, debt, acquisitions, corporate policies, behavioral corporate finance
JEL Classification: G30, G32, G34
Suggested Citation: Suggested Citation
Graham, John R. and Harvey, Campbell R. and Puri, Manju, Managerial Attitudes and Corporate Actions (May 22, 2012). Available at SSRN: https://ssrn.com/abstract=1432641 or http://dx.doi.org/10.2139/ssrn.1432641
By Ivo Welch