Hazed and Confused: Prenatal Pollutant Exposure and CEO Risk-Taking

79 Pages Posted: 17 Jul 2023 Last revised: 9 Aug 2023

See all articles by P. Raghavendra Rau

P. Raghavendra Rau

University of Cambridge

YiLin Wu

National Taiwan University - Department of Economics

Lok-Si Ieong

City University of New York, Baruch College - Zicklin School of Business - Department of Economics and Finance

Date Written: August 8, 2023

Abstract

Over the past several decades, a growing literature has documented the adverse health effects of pollution at the individual level. In this paper, we document the detrimental impact of prenatal exposures to pollution on CEOs. Specifically, we draw on the extensive medical literature documenting the cognitive and behavioral outcomes caused by developmental toxicants released by the most hazardous Superfund sites in the U.S., which were plausibly unknown when the CEOs were in utero. We find that CEOs with greater prenatal exposure to Superfund sites take more risks, but the risks do not pay off, adversely affecting the firms’ performances and the CEOs’ careers. Our results point to a large indirect effect of pollution on society beyond the immediate health effects, and demonstrate the role that prenatal exposure to pollution plays in affecting CEO risk-taking.

Keywords: Pollution, Superfund, CERCLA, Environmental risk, Cognitive or mental acuity, Developmental toxicity, CEO early life experience, Fetal origins hypothesis, Risk-taking, Firm performance, CEO turnover

JEL Classification: D22, D90, D91, G30, I10, Q50, Q53

Suggested Citation

Rau, P. Raghavendra and Wu, YiLin and Ieong, Lok-Si, Hazed and Confused: Prenatal Pollutant Exposure and CEO Risk-Taking (August 8, 2023). Available at SSRN: https://ssrn.com/abstract=4503598 or http://dx.doi.org/10.2139/ssrn.4503598

P. Raghavendra Rau (Contact Author)

University of Cambridge ( email )

Cambridge Judge Business School
Trumpington Street
Cambridge, Cambridgeshire CB21AG
United Kingdom
3103626793 (Phone)

HOME PAGE: http://www.raghurau.com/

YiLin Wu

National Taiwan University - Department of Economics ( email )

21 Hsiu Chow Rd
Taipei, 10020
Taiwan

Lok-Si Ieong

City University of New York, Baruch College - Zicklin School of Business - Department of Economics and Finance ( email )

17 Lexington Avenue
New York, NY 10010
United States

HOME PAGE: http://www.richardlsieong.com

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