Subordinate Executives’ Horizon and Firm Policies

Allbwn ymchwil: Cyfraniad at gyfnodolynErthygladolygiad gan gymheiriaid

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  • Mohamed Mekhaimer
    St. John Fisher College, NY
  • Alex Abakah
    Bentley University, MA
  • Awad Ibrahim
    University of Portsmouth
  • Khaled Hussainey
    University of Portsmouth
Motivated by the internal governance theory, we investigate the links between subordinate executives' horizon and firm policies. Using the number of years to retirement to capture subordinate executives' horizon inside the firm, we find that subordinates' horizon is positively associated with firm's risk-taking, long-term investments growth, and research and development productivity, but negatively related to the dividend decision and the payout ratio. We also find a positive relationship between subordinates' horizon and firm value. Our results are robust to controlling for alternative explanations including the pay gap between CEO and subordinate executives, executives' overconfidence, CEO's decision horizon, and other governance mechanisms. The results are also robust to alternative measures of subordinates' horizon, and after addressing potential endogeneity concerns.
Iaith wreiddiolSaesneg
Rhif yr erthygl102220
CyfnodolynJournal of Corporate Finance
Dyddiad ar-lein cynnar21 Mai 2022
Dynodwyr Gwrthrych Digidol (DOIs)
StatwsCyhoeddwyd - 1 Meh 2022
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