It Takes Two to Tango: Spousal Risk Preferences and CEO Risk-Taking Behavior

41 Pages Posted: 6 Apr 2022

See all articles by Constantinos Antoniou

Constantinos Antoniou

University of Warwick - Warwick Business School

Carina Cuculiza

Marquette University

Alok Kumar

University of Miami - Miami Herbert Business School

Lizhengbo Yang

University of Warwick - Warwick Business School

Date Written: March 1, 2022

Abstract

This paper examines whether the corporate decisions of S&P 500 CEOs are influenced by spousal risk preferences. We hand-collect data on the cultural origins of CEOs and their spouses to measure within-marriage transmission of cultural norms. We find that spousal risk preference influences a CEO’s attitude towards uncertainty and corporate risk-taking behavior. CEOs adopt relatively safer corporate policies if their spouses are relatively more risk averse, especially if they belong to collectivist cultures. Collectively, these findings suggest that the cultural composition of CEO household affects corporate decisions.

Keywords: Cultural norms, spousal risk preferences, corporate risk-taking, litigation risk, individualism.

JEL Classification: G32, G41

Suggested Citation

Antoniou, Constantinos and Cuculiza, Carina and Kumar, Alok and Yang, Lizhengbo, It Takes Two to Tango: Spousal Risk Preferences and CEO Risk-Taking Behavior (March 1, 2022). Available at SSRN: https://ssrn.com/abstract=4037025 or http://dx.doi.org/10.2139/ssrn.4037025

Constantinos Antoniou

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

Carina Cuculiza

Marquette University ( email )

P.O. Box 1881
Milwaukee, WI 53201-1881
United States

Alok Kumar (Contact Author)

University of Miami - Miami Herbert Business School ( email )

512B Jenkins Building
Department of Finance
Coral Gables, FL 33124-6552
United States
305-284-1882 (Phone)

HOME PAGE: http://moya.bus.miami.edu/~akumar

Lizhengbo Yang

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

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