Study links personal, corporate risk-taking
Published: August 10, 2011 / Author: Mendoza College
A CEO who enjoys the adrenaline rush of flying a
private airplane is more likely than other chief executives to exhibit
similarly bold management characteristics, according to a new study by finance
professors at the University of Oregon and the University of Notre Dame.
The study, “Cleared for Takeoff? CEO Personal Risk-Taking and Corporate
Policies,” documents a link between the personality traits of high-flying
executives and business moves such as mergers, acquisitions and accumulation of
debt. The study is co-authored by Stephen McKeon, an assistant professor of
finance at the UO’s Lundquist College of Business; and Matthew Cain, an
assistant professor of finance at Notre Dame’s Mendoza College of Business.
“CEOs who seek thrills in their personal lives are more likely than
others to be aggressive in their corporate policies,” McKeon said.
“They also tend to be effective leaders. If anything, these CEOs execute
acquisitions that are more value-creating than those completed by other
For their study, McKeon and Cain compared 179 corporate executives who hold
private pilots’ licenses to 2,900 non-pilot CEOs. The Sensation Seeking Scale –
developed in the 1970s by psychologist Marvin Zuckerman and used since then in
hundreds of psychological studies – identifies the desire to fly airplanes as a
very high predictor of thrill- and adventure-seeking traits.
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This story also
appeared in Futurity and Red Orbit