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Asia Pacific Journal of Management
Erschienen in: Asia Pacific Journal of Management 1/2022

15.06.2020

CEO age and risk-taking of family business in Malaysia: The inverse S-curve relationship

verfasst von: Siew-Boey Yeoh, Chee-Wooi Hooy

Erschienen in: Asia Pacific Journal of Management | Ausgabe 1/2022

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Abstract

The relationship between CEO age and corporate risk-taking has remained inconclusive after decades of research. This study contends that CEO may have different risk-taking propensities at different age stages and the relationship could be better captured by nonlinear function. Using a large sample of 6169 firm-year observations of public listed companies in Malaysia, we study the risk-taking behaviour of CEO for the period of 2009 to 2017. We find that CEO age has an inverse U-shaped relationship, such that risk-taking increases with CEO age but reduces beyond certain age threshold. Besides, drawing on socioemotional wealth perspective, we further examine the moderating effect of family CEO. We find that near-retirement family CEO reverses the conservative behaviour at old age and results an inverse S-curved relationship. Findings of this paper yields implication for family business and policymakers seeking to encourage risk-taking behaviour in emerging countries.
Vorheriger Artikel A cross-cultural examination of the relationships between job attitudes and workplace deviance
Nächster Artikel How do TMT shared cognitions shape firm performance? The roles of collective efficacy, trust, and competitive aggressiveness

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Fußnoten
2
The turning points is the CEO age that optimizes the quadratic equation. It is calculated using the following formula: LogCEOAge turning point = − (1/2) (coef(LogCEOAge)/coef(LogCEOAge2)), where coef() denotes the regression coefficients (only if statistically significant) of variables LogCEOAge and LogCEOAge2obtained from the estimation of a given model.
 
3
The turning points of a cubic function are calculated as follows: Assuming all other variables are constant and denoting LogCEOAge by x: R&D = 28.625x – 7.326x2 + 0.620x3. The turning points are found by differentiating y (R&D) with respect to x, letting \( \partial y/\partial x=0 \) and solving for x. To determine whether x is a maximum or minimum turning point, calculate the value of ∂2y/∂x2. If ∂2y/∂x2 > 0, the turning point is a maxima, if ∂2y/∂x2 < 0, the turning point is a minima.
 
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Metadaten
Titel
CEO age and risk-taking of family business in Malaysia: The inverse S-curve relationship
verfasst von
Siew-Boey Yeoh
Chee-Wooi Hooy
Publikationsdatum
15.06.2020
Verlag
Springer US
Erschienen in
Asia Pacific Journal of Management / Ausgabe 1/2022
Print ISSN: 0217-4561
Elektronische ISSN: 1572-9958
DOI
https://doi.org/10.1007/s10490-020-09725-x

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