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.
European Financial Management
Elnahas, A., Hossain, M. N., & Javadi, S. (2023). CEO marital status and corporate cash holdings. European Financial Management, 1– 43. https://doi.org/10.1111/eufm.12413
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Original published version available at https://doi.org/10.1111/eufm.12413
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