젊은 CEO가 위험을 추구하는가?

This study explores the relationship between the age of CEO and corporate risk. For firms listed on two Korean stock markets, we find that younger CEOs are more aggressive in pursuing risk than older CEOs. Creating three categories of CEOs by age: under 50, between 50 and 59, and 60 and above, we also show that young CEOs under 50 are more likely to take corporate risk than old CEOs over 60. Our results remain robust in estimating firm- and CEO-fixed effect models in order to control for unobservable firms’ or CEO’s individual characteristics and in using new sample rebuilt from propensity score matching. In addition, we also find that younger CEOs with overconfidence more actively take corporate risk than ones without overconfidence. This additional test indicates that younger CEOs in Korean listed firms are more aggressive in pursuing corporate risk due to their overconfidence. Finally, we also find no statistical difference between Chaebol and non-Chaebol firms partitioned following up the classification criterion of Korea Fair Trade Commissions. From our findings, younger CEOs have incentive to take corporate risk. We provide implications that providing younger CEOs in Korean listed firms with appropriate incentives such as reputation is important to managing corporate risk since they has the incentive to pursue risk more actively.