On February 26, 2020, 12.30-13.30, Dr. Timothy King (University of Kent) will give a talk on “A Safe Pair of Hands? CEO Career Experience and Risk-taking” (joint with Jens Hagendorff and Abhishek Srivastav).
We exploit the staggered deregulation of interstate banking in the U.S. to show that CEOs who have gained career experience at multiple banks lead riskier banks. Following shocks to industry competition, CEOs with managerial experience across different banks are associated with increases in market measures of risk and risk-increasing acquisitions. These findings cannot be explained by a range of formative CEO experiences or a CEO’s general ability. Our findings highlight the role of internally- versus externally-acquired experience in explaining how managers respond to a competitive shock.
Key Words: CEO Experience, Internal experience, External experience, Bank Risk, Banks