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Topic
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Looking in the Rearview Mirror: The Effect of Managers' Professional Experience on Corporate Financial Policy
Resource type
Authors/contributors
- Dittmar, Amy (Author)
- Duchin, Ran (Author)
Title
Looking in the Rearview Mirror: The Effect of Managers' Professional Experience on Corporate Financial Policy
Abstract
We track the employment history of over 9,000 managers to study the effects of professional experiences on corporate policies. Our identification strategy exploits exogenous CEO turnovers and employment in other firms and in non-CEO roles. Firms run by CEOs who experienced distress have less debt, save more cash, and invest less than other firms, with stronger effects in poorly governed firms. Experience has a stronger influence when it is more recent or occurs during salient periods in a manager's career. We find similar effects for CFOs. The results suggest that policies vary with managers' experiences and throughout managers' careers.
Publication
Review of Financial Studies
Volume
29
Issue
3
Pages
565-602
Date
2016
Citation
Dittmar, A., & Duchin, R. (2016). Looking in the Rearview Mirror: The Effect of Managers’ Professional Experience on Corporate Financial Policy. Review of Financial Studies, 29, 565–602.
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