CEO Risk Taking and Firm Policies: Evidence from CEO Employment History

I propose that CEO employment history is an observable characteristic that reveals the CEO’s unobservable risk-taking preferences. I hypothesize that CEOs that change employers more frequently (mobile CEOs) have a propensity to bear risk and implement riskier firm policies. Using a sample of S&P 1500 CEOs, I find that firms are more likely to hire mobile CEOs when the firm’s prior risk is high, firm-specific human capital is less important, the prior CEO turnover is forced, the prior CEO has a shorter tenure and the board is smaller and has fewer insiders. Mobile CEOs increase financial leverage, invest more in advertising and less in capital expenditures, and increase firm-specific risk. Mobile CEOs invest more (less) in R&D in homogenous (heterogeneous) industries where firm-specific knowledge is less (more) important in making investment decisions. Shareholders react positively to appointments of CEOs who change employers more frequently. I find no difference in long-run accounting performance for CEOs with different employment histories. Firms’ annual stock returns and sales growth are higher for CEOs who change employers more frequently. The cost of debt increases after the firm appoints a mobile CEO. These findings suggest that lower CEO risk aversion and the potential risk-shifting from shareholders to bondholders are sources of shareholder value increases. In sum, my findings provide evidence that CEO employment history is an observable characteristic that reveals the risk-taking preference of the CEO

Consumption of salmon. A survey of supermarkets in China

To keep up with the recent trends in consumer demand for salmon product in supermarkets, an understanding of the relationship between consumption and variation of lifestyle is needed. The present paper seeks to address this question by hypothesizing that consumption is strongly influenced by consumers’ sociodemograhic status, experience of salmon, beliefs with salmon’s attributes and preference for the preferred type of salmon. Understanding the main lifestyle factors influencing consumer behaviour is important for marketers who want to increase demand of Norwegian salmon in supermarkets. A recursive sequential model of decision making process is used to evaluate the effect of socio-demograhic, experience, preference, belief variables on salmon demand in supermarkets in China. The important findings lead to suggestions for the marketers, such as, ‘ try taste’ activity could be carried out through in store promotion; marketing campaign should be taken around fish counter; promotion should be taken in supermarkets that have consumers of middle and high income; making salmon into nicely packed sashimi with kinds of sauce could possibly increase demand; cooking skill should be demonstrated in store or through media; Marketing activities should be carried out more frequently in Shanghai and Guangzhou. Moreover, the impact of hygienic standard of the supermarket and advertisement are suggested to be investigated and evoked set to be applied in the further studies