Earticle

초록

영어

This paper uses conventional measures of CEO overconfidence: option holdings-based and net stock purchase-based measures to examine the impact of CEOs who hold firm-specific risk on insurer’s risk-taking and firm performance in U.S. publicly traded property-liability insurance companies. We find that two CEO overconfidence measures are negatively associated with insurer’s risk-taking and positively related to firm performance. We also provide evidence that CEOs who maintain high exposure to firm-specific risk exploit their private information to time stock-option exercises in an effort to increase the cash payout from these exercises. Our overall results indicate that CEOs who have private information on their firms’ future earnings maximize their personal profits by postponing option exercises or buying additional stocks, and that they tend to take a lower risk to protect their personal wealth in property-liability insurance firms. Therefore, our findings suggest that it may not be CEO overconfidence, but rather the private information and the intention to control the company’s risk that drive our results.

목차

ABSTRACT
Introduction
Literature Review and Hypotheses Development
Data and Methodology
Data and Sample Selection
Methodology
Variable Definitions
The Two Measures
Risk Taking Measures
Firm Performance Measures
Control Variables
Results
Descriptive Statistics
Empirical Results
Conclusion and Discussions
References

키워드

저자

• Sangyong Han [ Department of Non-life Insurance Research, Korea Insurance Research Institute ]
• Gene C. Lai [ Belk College of Business, Department of Finance, University of North Carolina ]
• Chia-Ling Ho [ Department of Risk Management and Insurance, Tamkang University ]

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간행물

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• 간행물명

  한국재무학회 학술대회

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• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330