Corpus ID: 14168618

Looking in the Rear View Mirror : The Effect of Managers ’ Professional Experience on Corporate Cash Holdings *

@inproceedings{Dittmar2013LookingIT,
  title={Looking in the Rear View Mirror : The Effect of Managers ’ Professional Experience on Corporate Cash Holdings *},
  author={Amy K. Dittmar and Ran Duchin},
  year={2013}
}
This paper examines how CEOs’ prior work experiences affect firms’ financial policies. Using employment data on more than 8,500 CEOs, we study the effect of being previously employed at a firm that faced financial difficulties on the decision to hold more cash. Our identification strategy exploits exogenous CEO turnovers and past employment in other firms and in roles other than the CEO. We find that firms run by CEOs who experienced financial difficulties are more conservative and hold… Expand
rhsmith.umd.edu
19 Citations
Highly Influential Citations
3
Background Citations
12
Results Citations
1

Tables from this paper

19 Citations

Citation Type

Citation Type

Cash Holdings and CEO Turnover
The determinants of firm level cash holdings are well documented, yet relatively less is known about the influence of CEO characteristics on corporate liquidity decisions. We examine changes in cash… Expand
Motives for corporate cash holdings: the CEO optimism effect
We examine the chief executive officer (CEO) optimism effect on managerial motives for cash holdings and find that optimistic and non-optimistic managers have significantly dissimilar purposes for… Expand
Is Family Control Relevant for Corporate Cash Holding Policy?
This empirical research examines the effect of family control on firms’ cash holding policy. Using a sample of western European firms, we confirm the precautionary motive for holding cash as… Expand
The Effects of Capital Infusions after IPO on Diversification and Cash Holdings
This paper examines how the number and the timing of capital infusions after the IPO affect the firm’s diversification decision and the firm’s level of cash-holdings. We find that the frequent… Expand
Made in CEO Factories
We find that over 20% of CEOs appointed at S&P 1500 firms from 1992 to 2010 came from 36 CEO factories. CEOs originated from CEO factories, factory CEOs, have significantly higher cumulative abnormal… Expand
1 Corporate Risk Culture
We examine the formation and evolution of firms’ attitudes towards risk and uncertainty, characterized by the shared risk preferences of corporate executives and directors, as well as their effect on… Expand
Work Experience and Managerial Performance : Evidence from Mutual Fund Mangers
Work experience is a key factor in hiring decision of managers. In investment, prior working experiences affect managers comparative advantage and therefore their style and performance. Using a… Expand
Can I trust you with my money ? The role of social trust in corporate cash policy
We examine how corporate cash policy is related to the level of social trust in a country, with trust defined as the subjective probability that an individual assigns to the event of a potential… Expand
Are They Different ? CEOs Made in CEO Factories
We examine the employment histories of CEOs at large US companies and find that a disproportionately large number of CEOs are originated from a small number of high-profile firms that are praised for… Expand
Are They Different ? CEOs Made in CEO Factories
We examine the employment histories of CEOs at large US companies and find that a disproportionately large number of CEOs are originated from a small number of high-profile firms that are praised for… Expand
...
1
2
...

References

SHOWING 1-10 OF 62 REFERENCES
Overconfidence and Early-Life Experiences: The Impact of Managerial Traits on Corporate Financial Policies
We show that measurable managerial characteristics have significant explanatory power for corporate financing decisions beyond traditional capital-structure determinants. First, managers who believe… Expand
Managerial Duties and Managerial Biases
Traits and biases of CEOs are known to significantly affect corporate outcomes. However, analyzing individual managers in isolation can result in misattribution. Our analysis focuses on the role of… Expand
Shaped by Booms and Busts: How the Economy Impacts CEO Careers and Management Styles
We show that economic conditions when managers enter the labor market have long-run effects on their career paths and managerial styles. Managers who began their careers during recessions become CEOs… Expand
Corporate Governance and Firm Cash Holdings
We examine the relation between the management of cash holdings and corporate governance. We find that firms with weaker corporate governance have smaller cash reserves. Further tests suggest that… Expand
International Corporate Governance and Corporate Cash Holdings
Abstract Agency problems are an important determinant of corporate cash holdings. For a sample of more than 11,000 firms from 45 countries, we find that corporations in countries where shareholders… Expand
Determinants of Corporate Cash Policy: A Comparison of Public and Private Firms
We provide one of the first large sample comparisons of cash policies in public and private U.S. firms. We first show that on average private firms hold less than half as much cash as public firms… Expand
Corporate Financial Policy and the Value of Cash
We examine the cross-sectional variation in the marginal value of corporate cash holdings that arises from differences in corporate financial policy. We begin by providing semi-quantitative… Expand
Why Do U.S. Firms Hold so Much More Cash than They Used to?
The average cash to assets ratio for U.S. industrial firms increases by 129% from 1980 to 2004. Because of this increase in the average cash ratio, American firms at the end of the sample period can… Expand
What Drives Corporate Liquidity? An International Survey of Cash Holdings and Lines of Credit
We survey chief financial officers from 29 countries to examine whether and why firms use lines of credit versus non-operational (excess) cash for their corporate liquidity. We find that these two… Expand
Why Do Firms Hold so Much Cash? A Tax-Based Explanation
U.S. corporations hold significant amounts of cash on their balance sheets, and these cash holdings have been justified in the existing empirical literature by transaction costs and precautionary… Expand
...
1
2
3
4
5
...