Generalist CEOs and conditional accounting conservatism

IF 2.2 3区管理学 Q2 BUSINESS, FINANCE

Journal of Business Finance & Accounting Pub Date : 2023-10-22 DOI:10.1111/jbfa.12761

Karel Hrazdil, Yi Liang, Lufei Ruan, Hakjoon Song

{"title":"Generalist CEOs and conditional accounting conservatism","authors":"Karel Hrazdil, Yi Liang, Lufei Ruan, Hakjoon Song","doi":"10.1111/jbfa.12761","DOIUrl":null,"url":null,"abstract":"<p>Generalist chief executive officers (CEOs) have accumulated transferrable general skills by working in multiple firms or industries. Recent decades have witnessed an increasing demand for generalist CEOs, which has resulted in a favorable job market for them. Favorable outside job opportunities reduce generalist CEOs’ career concerns and increase their agency problems and risk-taking incentives. We examine the relation between generalist CEOs and conditional conservatism. On the one hand, conditional conservatism could be positively associated with generalist CEOs because debtholders and shareholders often demand conservatism to alleviate heightened agency problems. On the other hand, a negative association could obtain because generalist CEOs can (1) create better information environments for firms, reduce information asymmetry and lessen stakeholders’ demand for conservatism and (2) have greater bargaining power and reduce the supply of conservatism. We document a positive association between generalist CEOs and conditional conservatism and show that the relationship is more pronounced in firms with a higher demand for conservatism. Our results are robust to a variety of sensitivity tests.</p>","PeriodicalId":48106,"journal":{"name":"Journal of Business Finance & Accounting","volume":"51 7-8","pages":"1693-1723"},"PeriodicalIF":2.2000,"publicationDate":"2023-10-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/jbfa.12761","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Business Finance & Accounting","FirstCategoryId":"91","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/jbfa.12761","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}

引用次数: 0

Abstract

Generalist chief executive officers (CEOs) have accumulated transferrable general skills by working in multiple firms or industries. Recent decades have witnessed an increasing demand for generalist CEOs, which has resulted in a favorable job market for them. Favorable outside job opportunities reduce generalist CEOs’ career concerns and increase their agency problems and risk-taking incentives. We examine the relation between generalist CEOs and conditional conservatism. On the one hand, conditional conservatism could be positively associated with generalist CEOs because debtholders and shareholders often demand conservatism to alleviate heightened agency problems. On the other hand, a negative association could obtain because generalist CEOs can (1) create better information environments for firms, reduce information asymmetry and lessen stakeholders’ demand for conservatism and (2) have greater bargaining power and reduce the supply of conservatism. We document a positive association between generalist CEOs and conditional conservatism and show that the relationship is more pronounced in firms with a higher demand for conservatism. Our results are robust to a variety of sensitivity tests.

查看原文本刊更多论文

通才型首席执行官和有条件的会计保守主义

通才型首席执行官（CEO）通过在多个公司或行业工作，积累了可迁移的通用技能。近几十年来，对通才型首席执行官的需求不断增加，这为他们创造了有利的就业市场。有利的外部工作机会减少了通才型首席执行官的职业顾虑，增加了他们的代理问题和冒险动机。我们研究了通才型首席执行官与条件保守主义之间的关系。一方面，有条件的保守主义可能与通才型首席执行官正相关，因为债务人和股东往往要求采取保守主义来缓解加剧的代理问题。另一方面，通才型首席执行官可能会产生负相关，因为通才型首席执行官可以（1）为企业创造更好的信息环境，减少信息不对称，降低利益相关者对保守主义的需求；（2）拥有更强的议价能力，减少保守主义的供给。我们记录了通才型首席执行官与有条件保守主义之间的正相关关系，并表明这种关系在对保守主义需求较高的企业中更为明显。我们的结果对各种敏感性检验都是稳健的。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Journal of Business Finance & Accounting BUSINESS, FINANCE-

CiteScore

4.40

自引率

17.20%

发文量

期刊介绍： Journal of Business Finance and Accounting exists to publish high quality research papers in accounting, corporate finance, corporate governance and their interfaces. The interfaces are relevant in many areas such as financial reporting and communication, valuation, financial performance measurement and managerial reward and control structures. A feature of JBFA is that it recognises that informational problems are pervasive in financial markets and business organisations, and that accounting plays an important role in resolving such problems. JBFA welcomes both theoretical and empirical contributions. Nonetheless, theoretical papers should yield novel testable implications, and empirical papers should be theoretically well-motivated. The Editors view accounting and finance as being closely related to economics and, as a consequence, papers submitted will often have theoretical motivations that are grounded in economics. JBFA, however, also seeks papers that complement economics-based theorising with theoretical developments originating in other social science disciplines or traditions. While many papers in JBFA use econometric or related empirical methods, the Editors also welcome contributions that use other empirical research methods. Although the scope of JBFA is broad, it is not a suitable outlet for highly abstract mathematical papers, or empirical papers with inadequate theoretical motivation. Also, papers that study asset pricing, or the operations of financial markets, should have direct implications for one or more of preparers, regulators, users of financial statements, and corporate financial decision makers, or at least should have implications for the development of future research relevant to such users.