TY - JOUR
T1 - The old guard: CEO age and corporate litigation
AU - Malm, James
AU - Adhikari, Hari P.
AU - Krolikowski, Marcin
AU - Sah, Nilesh B.
PY - 2021/9/1
Y1 - 2021/9/1
N2 - Recent studies have indicated that older Chief Executive Officers (CEOs) tend to be more capable, ethical, and risk-averse as compared to their younger counterparts. Keeping this in mind, we use a unique hand-collected data on corporate lawsuits to examine whether CEO age influences corporate litigation. After controlling for several important variables and employing several estimation techniques, we find that firms with older CEOs face fewer lawsuits. The results continue to hold when we decompose lawsuits into securities and non-securities lawsuits. Decomposing the sample firms into high-tech and labor-intensive firms, we find the negative relationship between CEO age and corporate litigation to be more pronounced in labor-intensive firms. Our results are especially relevant in the post-SOX regulation period suggesting that older CEOs enforce regulations and reduce litigation risks for their firms. Overall, our results uncover an important channel through which firms can mitigate corporate litigation, namely older CEOs.
AB - Recent studies have indicated that older Chief Executive Officers (CEOs) tend to be more capable, ethical, and risk-averse as compared to their younger counterparts. Keeping this in mind, we use a unique hand-collected data on corporate lawsuits to examine whether CEO age influences corporate litigation. After controlling for several important variables and employing several estimation techniques, we find that firms with older CEOs face fewer lawsuits. The results continue to hold when we decompose lawsuits into securities and non-securities lawsuits. Decomposing the sample firms into high-tech and labor-intensive firms, we find the negative relationship between CEO age and corporate litigation to be more pronounced in labor-intensive firms. Our results are especially relevant in the post-SOX regulation period suggesting that older CEOs enforce regulations and reduce litigation risks for their firms. Overall, our results uncover an important channel through which firms can mitigate corporate litigation, namely older CEOs.
KW - CEO age
KW - Corporate litigation
UR - https://www.scopus.com/inward/record.uri?partnerID=HzOxMe3b&scp=85110216165&origin=inward
UR - https://www.scopus.com/inward/citedby.uri?partnerID=HzOxMe3b&scp=85110216165&origin=inward
U2 - 10.1016/j.jbef.2021.100545
DO - 10.1016/j.jbef.2021.100545
M3 - Article
SN - 2214-6350
VL - 31
JO - Journal of Behavioral and Experimental Finance
JF - Journal of Behavioral and Experimental Finance
M1 - 100545
ER -