Open AccessChair-CEO age variation and insurance risk-taking behavior
Author(s) -
Demeh Daradkah
Publication year - 2021
Publication title -
journal of governance and regulation
Language(s) - English
Resource type - Journals
eISSN - 2306-6784
pISSN - 2220-9352
DOI - 10.22495/jgrv10i1art6
Subject(s) - corporate governance , chief executive officer , accounting , business , variation (astronomy) , proxy (statistics) , officer , panel data , actuarial science , market risk , demographic economics , economics , econometrics , management , finance , law , statistics , political science , physics , mathematics , astrophysics
Based on data of all listed insurance companies in Jordan over the period of 2008-2018, the study investigates the effect of chairman of the board of directors (chair) and chief executive officer (CEO) age variation on risk-taking behavior via different chair-CEO age variation proxies. Risk-taking behavior is measured by total risk, a proxy set up on the market’s risk perception. Thus, the study finds evidence that the chair-CEO age variation tends to decrease risk-taking practice in Jordan’s insurance companies, only if a generation gap exists. It doesn’t matter whether the chair or CEO is older. These results are consistent with Goergen, Limbach, and Scholz (2015) and Zhou, Kara, and Molyneux (2019). Different robustness tests (CEO-firm fixed effect, random effect, and dynamic panel estimation) confirm results. Overall, this study contributes to corporate governance literature; thus, enhancing the internal corporate governance mechanism is essential. Finally, it has a practical implication for stakeholders, policymakers, and researchers.