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CEO hubris and firm risk taking in China: the moderating role of managerial discretion. (2010)

The positive relationship between CEO hubris and firm risk taking was stronger when CEO managerial discretion was stronger: when a firm faced munificent but complex markets; had less inertia and more intangible resources; had a CEO who also chaired its board; and had a CEO who was not politically appointed.

 

Jiatao Li1 & Yi Tang2

1. Hong Kong University of Science and Technology
2. Hong Kong Polytechnic University

Academy of Management Journal 2010; 53(1): 45-68.

This study linked CEO hubris to firm risk taking and examined the moderating role of managerial discretion in this relationship. Drawing on upper echelons theory and behavioral decision theory, the authors developed and tested hypotheses using original survey data from 2,790 CEOs of diverse manufacturing firms in China.

The positive relationship between CEO hubris and firm risk taking was found to be stronger when CEO managerial discretion was stronger: when a firm faced munificent but complex markets; had less inertia and more intangible resources; had a CEO who also chaired its board; and had a CEO who was not politically appointed.

For more information, visit: CEO hubris and firm risk taking in China

 

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