Do they recall their past? CEOs’ liquidity policies across firms as they switch jobs

Enkhtaivan, Bolortuya; Davaadorj, Zagdbazar

doi:10.1016/j.jbef.2021.100462

Cited by 8 publications

(6 citation statements)

References 49 publications

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“…Georgakakis and Ruigrok (2017) argue that outsider CEOs with experience from a variety of industries will be better to transfer diverse industry-specific knowledge to the organization, resulting in superior financial outcomes. Enkhtaivan and Davaadorj (2021) find that the corporate liquidity policy of an executive's predecessor firm is significantly positively correlated with that of his successor firm. All these studies provide evidence that individual behavior of executives are consistent across different situations.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 84%

“…Based on this theory, in addition to the personal characteristics mentioned above, the cognitive and behavioral patterns will also be driven by executives' professional experience, then influencing the decision-making in other firms (Elsaid et al, 2011;Dittmar and Duchin, 2016;Chen et al, 2017;Georgakakis and Ruigrok, 2017;Enkhtaivan and Davaadorj, 2021). For example, Elsaid et al (2011) examine that stock market reacts positively to the hiring of an outsider with prior CEO experience.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

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Inter-Firm Executive Mobility and Corporate Social Responsibility: Evidence From China

Wang

Cao

2022

Front. Psychol.

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The executives of listed firms play an important role in the fulfillment of corporate social responsibility (CSR). Based on behavioral consistency theory, this study examines the association of CSR performance among multiple firms for the same executive served at different times. By tracking the movement of executives across Chinese listed firms over the period 2010–2019, we find that there is a significantly positive association between the predecessor and the successor firm’s CSR performance for the same executive, implying that an individual’s value and preference for CSR maintain consistency within a certain period of time. We also find that a longer employment gap and lower internal control effectiveness will damage the association of CSR performance between the predecessor and the successor firm. Our results are robust to testing in subsamples and controlling the endogeneity problems. Our conclusion provides a new perspective to understand the influence mechanism of CSR performance in the context of inter-firm executive mobility and provides empirical evidence for listed firms to improve their decision-making in hiring and evaluating executives.

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Section: Literature Review and Hypotheses Developmentmentioning

confidence: 84%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Inter-Firm Executive Mobility and Corporate Social Responsibility: Evidence From China

Wang

Cao

2022

Front. Psychol.

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“…Wang (2019) finds that job-hopping executives’ inter-organisational learning is associated with international acquisitions. Enkhtaivan and Davaadorj (2021) highlight a significantly positive association between the cash holdings of the prior and the subsequent firms when they are managed by the same executive.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 85%

Job-hopping executives and corporate social responsibility

Fang,

Tian,

2024

CAFR

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PurposeThe purpose of this study is to examine the relationship between the corporate social responsibility (CSR) performance of job-hopping executives at their former and subsequent firms.Design/methodology/approachWe conduct regression analyses using a sample of firms listed on the Shanghai and Shenzhen Stock Exchanges from 2010 to 2020 to examine whether CSR performance is similar from one firm to the next as executives switch jobs.FindingsWe find a positive relationship between the CSR performance of former and subsequent firms under job-hopping executives. This relationship is the strongest in the year of the job switch; it weakens in the second year and eventually disappears in the third year. In addition, we show that this relationship benefits different CSR stakeholder groups and is contingent on executive and subsequent firm attributes and job-hopping characteristics. Furthermore, we demonstrate that firms that hire a new chief executive officer from a firm with a strong track record in CSR, the new firm experiences a significant surge in CSR performance compared with firms that do not experience such a shock.Practical implicationsThis study has implications for executive hiring decisions.Originality/valueThis study extends the understanding of CSR determinants through the lens of inter-organisational ties associated with job-hopping executives.

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“…We extend Enkhtaivan and Davaadorj (2021) individual imprinting model to include the institutional imprinting effect. Because of our short-term WC focus, we change cash holding variables into WC measures and conduct multivariate fixed effect analyses as below:where i is an individual subscript, p (previous) and s (subsequent) are firm subscripts ( p ≠ s ), t is a time subscript.…”

Section: Methodsmentioning

confidence: 99%

“…The term "managers" in our context may apply to chief executive officers (CEOs), chief financial officers (CFOs) and/or chief operating officers (COOs) when referencing individuals at previous firms; individuals at subsequent firms are CEO hires/promotions only. Each of these executive positions represents considerable influence over policy decisions-such as debt, dividends, liquidity, supply chain, etc.-to reach CEO capital budgeting objectives affecting investment in WC (Dbouk et al, 2020;Deshmukh et al, 2013;Enkhtaivan and Davaadorj, 2021;Graham and Harvey, 2002). The finance literature uses different language for imprinting but provides several examples of its impact on subsequent corporate financial policies during executive career tenure.…”

Section: Managers and Cash Conversion Cyclementioning

confidence: 99%

Investigation of the multi-layers of imprinting on corporate working capital management

Davaadorj

Enkhtaivan

Weathers

2023

IJMF

Self Cite

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PurposeThe paper aims to investigate the imprinting effect on working capital (WC) management as higher-level managers' transition to chief executive officer (CEO) positions. This paper proposes that WC management defined as a shorter cash conversion cycle (CCC) can be carried forward to the new firm when the managers are appointed as a CEO.Design/methodology/approachThe authors employ a multivariate regression approach. The data in this study come from two sources: Execucomp which provides data for corporate managers of the largest 2,000 USA firms including S&P 1,500 US and Compustat which provides financial information of firms.FindingsThe authors find a positive imprinting effect of “new” CEOs on WC outcomes – proxied by the CCC. CCC shortens by approximately 16 days when CEOs are efficient managers at previous institutions, predominantly derived from improvements in inventory and payables. The effect is sensitive to individuals' age, familiarity with the industry and high-pressure circumstances.Practical implicationsThe paper includes important implications of WC management for firms to consider, especially during economic crises when liquidity management is a priority.Originality/valueThis paper extends the literature on the imprinting effect on managerial decision-making. The paper offers evidence of cooperative yet dynamic efforts in managing WC during CEO turnover events, which are unique findings.

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Do they recall their past? CEOs’ liquidity policies across firms as they switch jobs

Cited by 8 publications

References 49 publications

Inter-Firm Executive Mobility and Corporate Social Responsibility: Evidence From China

Inter-Firm Executive Mobility and Corporate Social Responsibility: Evidence From China

Job-hopping executives and corporate social responsibility

Investigation of the multi-layers of imprinting on corporate working capital management

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