Military CEOs

Efraim Benmelech*, Carola Frydman

*Corresponding author for this work

Research output: Contribution to journalArticle

60 Citations (Scopus)

Abstract

There is mounting evidence of the influence of personal characteristics of chief executive officers (CEOs) on corporate outcomes. In this paper we analyze the relation between military service of CEOs and managerial decisions, financial policies, and corporate outcomes. Exploiting exogenous variation in the propensity to serve in the military, we show that military service is associated with conservative corporate policies and ethical behavior. Military CEOs pursue lower corporate investment, are less likely to be involved in corporate fraudulent activity, and perform better during industry downturns. Taken together, our results show that military service has significant explanatory power for managerial decisions and firm outcomes.

Original languageEnglish (US)
Pages (from-to)43-59
Number of pages17
JournalJournal of Financial Economics
Volume117
Issue number1
DOIs
StatePublished - Jan 1 2015

Fingerprint

Chief executive officer
Military
Managerial decisions
Corporate investment
Industry
Financial policy
Propensity
Ethical behavior
Corporate policy
Personal characteristics

Keywords

  • CEOs
  • Corporate Governance
  • Ethics
  • Fraud
  • Military

ASJC Scopus subject areas

  • Accounting
  • Strategy and Management
  • Economics and Econometrics
  • Finance

Cite this

@article{cb4dbe07e5bc4a0e95bc0b5fa31fa703,
title = "Military CEOs",
abstract = "There is mounting evidence of the influence of personal characteristics of chief executive officers (CEOs) on corporate outcomes. In this paper we analyze the relation between military service of CEOs and managerial decisions, financial policies, and corporate outcomes. Exploiting exogenous variation in the propensity to serve in the military, we show that military service is associated with conservative corporate policies and ethical behavior. Military CEOs pursue lower corporate investment, are less likely to be involved in corporate fraudulent activity, and perform better during industry downturns. Taken together, our results show that military service has significant explanatory power for managerial decisions and firm outcomes.",
keywords = "CEOs, Corporate Governance, Ethics, Fraud, Military",
author = "Efraim Benmelech and Carola Frydman",
year = "2015",
month = "1",
day = "1",
doi = "10.1016/j.jfineco.2014.04.009",
language = "English (US)",
volume = "117",
pages = "43--59",
journal = "Journal of Financial Economics",
issn = "0304-405X",
publisher = "Elsevier",
number = "1",

}

Military CEOs. / Benmelech, Efraim; Frydman, Carola.

In: Journal of Financial Economics, Vol. 117, No. 1, 01.01.2015, p. 43-59.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Military CEOs

AU - Benmelech, Efraim

AU - Frydman, Carola

PY - 2015/1/1

Y1 - 2015/1/1

N2 - There is mounting evidence of the influence of personal characteristics of chief executive officers (CEOs) on corporate outcomes. In this paper we analyze the relation between military service of CEOs and managerial decisions, financial policies, and corporate outcomes. Exploiting exogenous variation in the propensity to serve in the military, we show that military service is associated with conservative corporate policies and ethical behavior. Military CEOs pursue lower corporate investment, are less likely to be involved in corporate fraudulent activity, and perform better during industry downturns. Taken together, our results show that military service has significant explanatory power for managerial decisions and firm outcomes.

AB - There is mounting evidence of the influence of personal characteristics of chief executive officers (CEOs) on corporate outcomes. In this paper we analyze the relation between military service of CEOs and managerial decisions, financial policies, and corporate outcomes. Exploiting exogenous variation in the propensity to serve in the military, we show that military service is associated with conservative corporate policies and ethical behavior. Military CEOs pursue lower corporate investment, are less likely to be involved in corporate fraudulent activity, and perform better during industry downturns. Taken together, our results show that military service has significant explanatory power for managerial decisions and firm outcomes.

KW - CEOs

KW - Corporate Governance

KW - Ethics

KW - Fraud

KW - Military

UR - http://www.scopus.com/inward/record.url?scp=84931053650&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84931053650&partnerID=8YFLogxK

U2 - 10.1016/j.jfineco.2014.04.009

DO - 10.1016/j.jfineco.2014.04.009

M3 - Article

VL - 117

SP - 43

EP - 59

JO - Journal of Financial Economics

JF - Journal of Financial Economics

SN - 0304-405X

IS - 1

ER -