CEO marital status and corporate cash holdings

Department or Administrative Unit

Finance and Supply Chain Management

Document Type

Article

Author Copyright

© 2023 John Wiley & Sons Ltd.

Publication Date

1-12-2023

Journal

European Financial Management

Abstract

We examine the effect of CEO marital status on corporate cash holdings. Consistent with the classical agency framework, we find that firms with single CEOs hold more cash compared to otherwise similar firms with married CEOs and that the excess cash held by single CEOs is significantly discounted by shareholders. Our findings survive a battery of tests to ease endogeneity and selection bias, confirming that results are not simply reflecting innate heterogeneity in preferences. Overall, our findings indicate that a variable outside the common firm- and macro-level determinants, CEO marital status, can significantly influence corporate policies.

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This article was originally published in European Financial Management. The full-text article from the publisher can be found here.

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