IDEAS home Printed from https://ideas.repec.org/a/bla/finrev/v59y2024i3p687-717.html
   My bibliography  Save this article

Do firms led by founders take higher risk?

Author

Listed:
  • Edward Lawrence
  • Yuka Nishikawa
  • Arun Upadhyay

Abstract

This study examines whether firms led by founder‐CEOs are significantly different from firms led by nonfounder‐CEOs in terms of the nature of their risk. Our results show that founder‐led firms are associated with higher operational but lower financial risk. We find that the differential nature of risk‐taking in founder‐CEO firms is driven by CEO's influence, their propensity of removal, and the probability of bankruptcy of the firm. While CEO‐chair duality and the sensitivity of founder‐CEO firm's probable bankruptcy play significant roles in determining the level of financial risk, the sensitivity of founder‐CEOs to forced turnover leads to higher operational risk.

Suggested Citation

  • Edward Lawrence & Yuka Nishikawa & Arun Upadhyay, 2024. "Do firms led by founders take higher risk?," The Financial Review, Eastern Finance Association, vol. 59(3), pages 687-717, August.
    • Handle: RePEc:bla:finrev:v:59:y:2024:i:3:p:687-717
    DOI: 10.1111/fire.12388
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/fire.12388
    Download Restriction: no
    File URL: https://libkey.io/10.1111/fire.12388?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:finrev:v:59:y:2024:i:3:p:687-717. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/efaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.