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- Publisher Website: 10.1016/j.jcorpfin.2017.11.001
- Scopus: eid_2-s2.0-85034647921
- WOS: WOS:000424721900014
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Article: Employees' risk attitude and corporate risk taking: Evidence from pension asset allocations
Title | Employees' risk attitude and corporate risk taking: Evidence from pension asset allocations |
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Authors | |
Keywords | Pension asset allocation Bankruptcy Labor Risk aversion Risk taking |
Issue Date | 2018 |
Publisher | Elsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jcorpfin |
Citation | Journal of Corporate Finance, 2018, v. 48, p. 261-274 How to Cite? |
Abstract | Do labor characteristics matter to corporate decisions? We answer this question by examining whether firms consider the risk attitude of rank-and-file employees in investing the pension assets of defined benefit plans. We construct a direct measure of employees' risk attitude from their defined contribution pension portfolio allocations. We find that firms with more risk-averse employees exhibit higher sensitivity to their own default risk in their defined benefit pension investment. The reduction in pension risk taking induced by sponsor risk is more pronounced for low R&D firms, and in the period with stringent pension regulation. We further show that sponsors consider employees' risk aversion in making pension investment decisions regardless of the power of labor union. Overall, our findings suggest that firms incorporate employees' risk attitude into corporate policies. |
Persistent Identifier | http://hdl.handle.net/10722/279026 |
ISSN | 2023 Impact Factor: 7.2 2023 SCImago Journal Rankings: 3.182 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Guan, Y | - |
dc.contributor.author | Tang, DY | - |
dc.date.accessioned | 2019-10-21T02:18:15Z | - |
dc.date.available | 2019-10-21T02:18:15Z | - |
dc.date.issued | 2018 | - |
dc.identifier.citation | Journal of Corporate Finance, 2018, v. 48, p. 261-274 | - |
dc.identifier.issn | 0929-1199 | - |
dc.identifier.uri | http://hdl.handle.net/10722/279026 | - |
dc.description.abstract | Do labor characteristics matter to corporate decisions? We answer this question by examining whether firms consider the risk attitude of rank-and-file employees in investing the pension assets of defined benefit plans. We construct a direct measure of employees' risk attitude from their defined contribution pension portfolio allocations. We find that firms with more risk-averse employees exhibit higher sensitivity to their own default risk in their defined benefit pension investment. The reduction in pension risk taking induced by sponsor risk is more pronounced for low R&D firms, and in the period with stringent pension regulation. We further show that sponsors consider employees' risk aversion in making pension investment decisions regardless of the power of labor union. Overall, our findings suggest that firms incorporate employees' risk attitude into corporate policies. | - |
dc.language | eng | - |
dc.publisher | Elsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jcorpfin | - |
dc.relation.ispartof | Journal of Corporate Finance | - |
dc.subject | Pension asset allocation | - |
dc.subject | Bankruptcy | - |
dc.subject | Labor | - |
dc.subject | Risk aversion | - |
dc.subject | Risk taking | - |
dc.title | Employees' risk attitude and corporate risk taking: Evidence from pension asset allocations | - |
dc.type | Article | - |
dc.identifier.email | Tang, DY: yjtang@hku.hk | - |
dc.identifier.authority | Tang, DY=rp01096 | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1016/j.jcorpfin.2017.11.001 | - |
dc.identifier.scopus | eid_2-s2.0-85034647921 | - |
dc.identifier.hkuros | 308112 | - |
dc.identifier.volume | 48 | - |
dc.identifier.spage | 261 | - |
dc.identifier.epage | 274 | - |
dc.identifier.isi | WOS:000424721900014 | - |
dc.publisher.place | Netherlands | - |
dc.identifier.issnl | 0929-1199 | - |