Chen, J orcid.org/0000-0002-4076-7121, Su, X, Tian, X et al. (1 more author) (2022) Does customer-base structure influence managerial risk-taking incentives? Journal of Financial Economics, 143 (1). pp. 462-483. ISSN 0304-405X
Abstract
We find strong evidence that when a firm's customer base is more concentrated, the firm's CEO receives more risk-taking incentives in her compensation package. This finding is robust to numerous alternative measures, alternative specifications, alternative subsamples, and different attempts that mitigate endogeneity concerns. Further, the positive effect of customer concentration on CEO risk-taking incentive provision is more prominent when the CEO is more reluctant to take risks, when the firm has more investment opportunities, and when the firm is more prone to the costs of losing large customers. These findings are consistent with the notion that boards provide additional risk-taking incentives to offset the CEO's aversion to the risk of non-diversified revenue streams, thereby preventing excessive managerial conservatism at the expense of value maximization.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2021 Elsevier B.V. All rights reserved. This is an author produced version of an article published in Journal of Financial Economics. Uploaded in accordance with the publisher's self-archiving policy. |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 11 Feb 2021 14:49 |
Last Modified: | 27 Jul 2023 00:13 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.jfineco.2021.07.015 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:170925 |