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Article

The Impact of CEO Educational Background on Corporate Risk-Taking in China

by
Jinyi Zhang
1,
Chunxiao Xue
1,2 and
Jianing Zhang
1,2,*
1
College of Business and Public Management, Wenzhou-Kean University, Wenzhou 325060, China
2
Center for Big Data and Decision-Making Technologies, Wenzhou-Kean University, Wenzhou 325060, China
*
Author to whom correspondence should be addressed.
J. Risk Financ. Manag. 2023, 16(1), 9; https://doi.org/10.3390/jrfm16010009
Submission received: 15 November 2022 / Revised: 19 December 2022 / Accepted: 21 December 2022 / Published: 24 December 2022
(This article belongs to the Special Issue Contemporary Issues in Corporate Governance and Firm Performance)
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Abstract

This article investigates whether, and how, CEO educational background affects Chinese corporate risk-taking. Using a sample of 4681 firm-year observations from 2012 to 2020, we find that CEO educational background is negatively associated with corporate risk-taking. The nonlinear quadratic regression shows a convex relationship, consistent with the finding that the effect is more profound for the subsample with relatively lower education levels. The negative relationship is stronger for the firms with higher leverage, with lower tangibility, and in non-manufacturing industries. We also address the endogeneity issue using a two-stage least squares regression. This paper may provide valuable insights for shareholders, helping them to hire the most suitable CEOs to achieve shareholders’ objectives and increase the corporation’s competitiveness in the market.
Keywords: educational background; CEO; risk taking; Chinese stock market educational background; CEO; risk taking; Chinese stock market

Share and Cite

MDPI and ACS Style

Zhang, J.; Xue, C.; Zhang, J. The Impact of CEO Educational Background on Corporate Risk-Taking in China. J. Risk Financ. Manag. 2023, 16, 9. https://doi.org/10.3390/jrfm16010009

AMA Style

Zhang J, Xue C, Zhang J. The Impact of CEO Educational Background on Corporate Risk-Taking in China. Journal of Risk and Financial Management. 2023; 16(1):9. https://doi.org/10.3390/jrfm16010009

Chicago/Turabian Style

Zhang, Jinyi, Chunxiao Xue, and Jianing Zhang. 2023. "The Impact of CEO Educational Background on Corporate Risk-Taking in China" Journal of Risk and Financial Management 16, no. 1: 9. https://doi.org/10.3390/jrfm16010009

APA Style

Zhang, J., Xue, C., & Zhang, J. (2023). The Impact of CEO Educational Background on Corporate Risk-Taking in China. Journal of Risk and Financial Management, 16(1), 9. https://doi.org/10.3390/jrfm16010009

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