Faculty Publications

Turnover Threat And CEO Risk-Taking Behavior In The Banking Industry

Document Type

Article

Keywords

Board independence, CEO risk-taking, CEO turnover

Journal/Book/Conference Title

Journal of Banking and Finance

Volume

96

First Page

87

Last Page

105

Abstract

We examine how the threat of turnover affects bank CEOs’ risk-taking behavior. Using a sample of 212 U.S. banks from 1995 to 2010, in contrast with prior studies focusing on non-banking firms, we find a non-monotonic relationship between CEO turnover threat and CEO risk-taking behavior in the banking industry. Bank CEOs increase their risk-taking when the perceived turnover threat is moderate but reduce risk-taking when turnover threat is more imminent. This effect tends to concentrate on banks with a majority of independent directors.

Department

Department of Finance

Original Publication Date

11-1-2018

DOI of published version

10.1016/j.jbankfin.2018.08.007

Repository

UNI ScholarWorks, Rod Library, University of Northern Iowa

Language

en

Link to Full Text

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