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Measuring firm-level manager risk perception

Author

Listed:
  • He, Yu
  • Liu, Zhenya
  • Lu, Shanglin
  • Wei, Ran

Abstract

Using textual analysis of Chinese listed firms’ filings, we construct a new firm-level measure of manager risk perception. The measure identifies the extent of risk perceived by managers. We validate our measure by showing that it varies over time and across industries, correlates with aggregate economic policy uncertainty and firm-level stock return volatility, and relates cross-sectionally with firm characteristics. Managers with higher risk perception leads to a lower level of firm investment.

Suggested Citation

  • He, Yu & Liu, Zhenya & Lu, Shanglin & Wei, Ran, 2024. "Measuring firm-level manager risk perception," Finance Research Letters, Elsevier, vol. 69(PB).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324011590
    DOI: 10.1016/j.frl.2024.106130
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    Keywords

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    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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