Does Founder CEO Status Affect Firm Risk Taking?

Yi Tang, Jiatao Li, Yu Liu

Research output: Journal PublicationArticlepeer-review

9 Citations (Scopus)

Abstract

Grounded in the strategic leadership literature and upper echelons theory, this study proposes that founder CEOs tend to take more risks than agent CEOs because of the former’s overconfidence. We further suggest that the relationship between founder CEO status and firm risk taking can be moderated by certain internal or external factors that influence just how overconfident a CEO might be. Our theoretical predictions are well supported by a large survey data set on Chinese CEOs. Specifically, the positive relationship between founder CEO status and firm risk taking weakens when the CEO is younger, when the CEO also chairs the board of directors, and when the CEO’s task environment is less uncertain, less complex, and more munificent.

Original languageEnglish
Pages (from-to)322-334
Number of pages13
JournalJournal of Leadership and Organizational Studies
Volume23
Issue number3
DOIs
Publication statusPublished - 1 Aug 2016
Externally publishedYes

Keywords

  • Chinese firms
  • founder CEOs
  • overconfidence
  • risk taking
  • upper echelons theory

ASJC Scopus subject areas

  • Business and International Management
  • Sociology and Political Science
  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management Science and Operations Research

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