The Face of Risk: CEO Facial Masculinity and Firm Risk

European Financial Management, Forthcoming

82 Pages Posted: 30 Jan 2015 Last revised: 18 Feb 2018

See all articles by Shinichi Kamiya

Shinichi Kamiya

Nanyang Technological University (NTU) - Nanyang Business School

Y. Han (Andy) Kim

Sungkyunkwan University

Soohyun Park

Sungkyunkwan University, School of Business Administration, Students

Multiple version iconThere are 2 versions of this paper

Date Written: November 4, 2017

Abstract

We examine whether a male CEO’s facial masculinity, measured by facial width-to-height ratio (fWHR), predicts the riskiness of his firm. Using the face pictures of 1,162 CEOs in the Execucomp database, we find supporting evidence. Firms with more masculine-faced CEOs have higher stock return volatility and higher financial leverage and are more acquisitive. Their frequency of acquisitions, the dollar amount spent on acquisitions, and the takeover premium are all higher. We find that more masculine-faced CEOs’ compensation is more sensitive to the risk of the firm. The result is robust when we use AI (artificial intelligence)-measured fWHR of the CEOs.

Keywords: masculinity, culture, testosterone, risk, CEO, leverage, M&A, fWHR, VEGA, artificial intelligence

JEL Classification: G02, G32, G34, M1, Z1

Suggested Citation

Kamiya, Shinichi and Kim, Y. Han (Andy) and Park, Soohyun, The Face of Risk: CEO Facial Masculinity and Firm Risk (November 4, 2017). European Financial Management, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2557038 or http://dx.doi.org/10.2139/ssrn.2557038

Shinichi Kamiya

Nanyang Technological University (NTU) - Nanyang Business School ( email )

Singapore, 639798
Singapore

Y. Han (Andy) Kim (Contact Author)

Sungkyunkwan University ( email )

422 School of Business
25-2 SungKyunKwan-Ro, Jongno-ju
Seoul, 110-745
Korea, Republic of (South Korea)
+82-2-760-0622 (Phone)
+82-2-760-0622 (Fax)

HOME PAGE: http://https://sites.google.com/site/andyyhankim/

Soohyun Park

Sungkyunkwan University, School of Business Administration, Students ( email )

206 International Hall
Seoul 110-745
Korea, Republic of (South Korea)

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