view in publisher's site
- خانه
- لیست مقالات
- چکیده
Locked-In: The Effect of CEOs' Capital Gains Taxes on Corporate Risk-Taking
ABSTRACT
I study the effects of CEOs' unrealized capital gains tax liabilities (tax burdens) on corporate risk-taking. Recent work suggests that high tax burdens discourage CEOs from selling stock. I hypothesize that this causes the executives to become overexposed to firm-specific risk, thereby reducing their willingness to make risky corporate decisions. In a series of tests, I find that corporate risk-taking decreases as CEOs' personal tax burdens increase. Further, firms with CEOs who are more locked-in to their stock positions (i.e., CEOs with higher tax burdens) experience larger increases in risk-taking following federal and state tax cuts. When I investigate the mechanism behind this relation, I find that tax cuts trigger stock sales by the locked-in executives, allowing for improved diversification. Overall, my findings indicate that the personal tax burdens of CEOs affect the firm by reducing executives' preferences for risk at the corporate level.
JEL Classifications: G32; H24; J33; M52.
- مقاله Economics and Econometrics
- ترجمه مقاله Economics and Econometrics
- مقاله اقتصاد و اقتصادسنجی
- ترجمه مقاله اقتصاد و اقتصادسنجی
- مقاله Finance
- ترجمه مقاله Finance
- مقاله مالی
- ترجمه مقاله مالی
- مقاله Accounting
- ترجمه مقاله Accounting
- مقاله حسابداری
- ترجمه مقاله حسابداری
ترجمه کنید