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Subordinate Executives’ Horizon and Firm Policies

Research output: Contribution to journal › Article › peer-review

Standard Standard

Subordinate Executives’ Horizon and Firm Policies. / Mekhaimer, Mohamed; Abakah, Alex ; Ibrahim, Awad et al.
In: Journal of Corporate Finance, 01.06.2022.

Research output: Contribution to journal › Article › peer-review

HarvardHarvard

Mekhaimer, M, Abakah, A, Ibrahim, A & Hussainey, K 2022, 'Subordinate Executives’ Horizon and Firm Policies', Journal of Corporate Finance. https://doi.org/10.1016/j.jcorpfin.2022.102220

APA

Mekhaimer, M., Abakah, A., Ibrahim, A., & Hussainey, K. (2022). Subordinate Executives’ Horizon and Firm Policies. Journal of Corporate Finance, Article 102220. https://doi.org/10.1016/j.jcorpfin.2022.102220

CBE

Mekhaimer M, Abakah A, Ibrahim A, Hussainey K. 2022. Subordinate Executives’ Horizon and Firm Policies. Journal of Corporate Finance. Article 102220. https://doi.org/10.1016/j.jcorpfin.2022.102220

MLA

Mekhaimer, Mohamed et al. "Subordinate Executives’ Horizon and Firm Policies". Journal of Corporate Finance. 2022. https://doi.org/10.1016/j.jcorpfin.2022.102220

VancouverVancouver

Mekhaimer M, Abakah A, Ibrahim A, Hussainey K. Subordinate Executives’ Horizon and Firm Policies. Journal of Corporate Finance. 2022 Jun 1;102220. Epub 2022 May 21. doi: 10.1016/j.jcorpfin.2022.102220

Author

Mekhaimer, Mohamed ; Abakah, Alex ; Ibrahim, Awad et al. / Subordinate Executives’ Horizon and Firm Policies. In: Journal of Corporate Finance. 2022.

RIS

TY - JOUR

T1 - Subordinate Executives’ Horizon and Firm Policies

AU - Mekhaimer, Mohamed

AU - Abakah, Alex

AU - Ibrahim, Awad

AU - Hussainey, Khaled

PY - 2022/6/1

Y1 - 2022/6/1

N2 - 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.

AB - 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.

U2 - 10.1016/j.jcorpfin.2022.102220

DO - 10.1016/j.jcorpfin.2022.102220

M3 - Article

JO - Journal of Corporate Finance

JF - Journal of Corporate Finance

SN - 0929-1199

M1 - 102220

ER -