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Journal of Economics and Finance

Erschienen in:

01.01.2015

CEO age, education, and introduction of hedging in the oil and gas industry

verfasst von: Zahid Iqbal

Erschienen in: Journal of Economics and Finance | Ausgabe 1/2015

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Abstract

This study examines if a CEO’s age and education explain introduction of hedging in the oil and gas industry. We compare CEO age, college degree, and educational institutions between the hedgers that initiated use of derivatives and the nonhedgers that never used hedging. Our findings show that a hedge CEO is younger than a nonhedge CEO in the year hedging is initiated. We also find evidence that a higher percentage of the hedge CEOs have petroleum-related degrees and a smaller percentage have business degrees when compared to the nonhedge CEOs. The results of our logistic regressions indicate that CEO age explains the use of financial derivatives in the oil and gas industry.

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As a test of robustness, we use age of nonhedge CEO in the year of first data availability on 10-k filings in SEC Edgar or Standard and Poor’s MergentOnline database. The mean age for the nonhedge CEOs is 56.41 years which is significantly different (at the 1 % level) from the mean age for the hedge CEOs. We also compare the introduction age of a hedge CEO against the age of a nonhedge CEO in the first year of a major decline in adjusted WTI during the sample period. The results are qualitatively similar.

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Titel: CEO age, education, and introduction of hedging in the oil and gas industry
verfasst von: Zahid Iqbal
Publikationsdatum: 01.01.2015
Verlag: Springer US
Erschienen in: Journal of Economics and Finance / Ausgabe 1/2015
Print ISSN: 1055-0925
Elektronische ISSN: 1938-9744
DOI: https://doi.org/10.1007/s12197-013-9274-y

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