CEO power and matching leverage preferences

Timo Korkeamäki, Eva Liljeblom, Daniel Pasternack

Research output: Contribution to journalArticleScientificpeer-review

7 Citations (Scopus)

Abstract

We study the effect of managerial power on CEOs’ tendency to imprint their personal leverage preferences upon the firms they manage. Using a unique data source that allows us to measure personal wealth and indebtness in great detail, we find a connection between CEOs’ personal leverage and that of their firms. The connection is driven by the CEOs with a longer tenure and the CEOs who serve in a dual role. The connection is significantly weaker for those CEOs who have a proportion of their personal wealth tied to the firm. Presence of block holders also weakens the connection.
Original languageEnglish
Peer-reviewed scientific journalJournal of corporate finance
Volume45
Issue numberAugust
Pages (from-to)19-30
Number of pages12
ISSN0929-1199
DOIs
Publication statusPublished - 12.04.2017
MoE publication typeA1 Journal article - refereed

Keywords

  • 512 Business and Management
  • CEO power
  • CEO behaviour
  • Matching preferences
  • Personal leverage

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