This website uses cookies to help us give you the best experience when you visit our website. By continuing to use this website, you consent to our use of these cookies.
Read more
Stricter enforcement of post-employment restrictions that strengthens trade secrets protection also limits CEOs’ alternative employment opportunities.
We find that such mobility restrictions, which heightened CEO career concerns can dampen their risk-taking incentives and distort corporate financing decisions, particularly in firms whose CEOs value outside employment opportunities relatively highly. Stock market reactions to acquisition announcements suggest that intensified CEO career concerns from mobility restrictions compromise the quality of investment decisions. More generally, managerial career concerns adversely affect shareholder value by exacerbating risk-related agency conflicts. Thus, our evidence suggests that shareholders can benefit from more unconstrained labor markets that promote managerial risk-taking
We explore a novel survey on responsible investing by institutional investors around the world and match it to archival data on their equity portfolio...