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Military CEOs

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  • Efraim Benmelech
  • Carola Frydman

Abstract

There is mounting evidence of the influence of personal characteristics of CEOs on corporate outcomes. In this paper we analyze the relation between military service of CEOs and managerial decisions, financial policies, and corporate outcomes. Exploiting exogenous variation in the propensity to serve in the military, we show that military service is associated with conservative corporate policies and ethical behavior. Military CEOs pursue lower corporate investment, are less likely to be involved in corporate fraudulent activity, and perform better during industry downturns. Taken together, our results show that military service has significant explanatory power for managerial decisions and firm outcomes.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19782.

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Date of creation: Jan 2014
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Handle: RePEc:nbr:nberwo:19782

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Cited by:
  1. Limbach, Peter & Sonnenburg, Florian, 2014. "CEO fitness and firm value," CFR Working Papers 14-12, University of Cologne, Centre for Financial Research (CFR).

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