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Título
Low interest rates and executive risk-taking incentives: Evidence from the United States
Autor
Facultad/Centro
Área de conocimiento
Título de la revista
BRQ Business Research Quarterly
Número de la revista
4
Cita Bibliográfica
Castro Castro, P., Tascón Fernández, M. T., Castaño Gutiérrez, F. J., y Amor Tapia, B. (2021). Low interest rates and executive risk- taking incentives: Evidence from the united states. Business Research Quarterly, 24(4), 324-354. https://doi.org/10.1177/2340944420927716.
Editorial
Sage
Fecha
2021
ISSN
2340-9444
Resumen
[EN] This article contributes to the literature by indicating how certain monetary policies impact the compensation incentives
of US managers to adopt riskier business policies. Specifically, based on the agency problems between shareholders and
managers and between shareholders and creditors, a research framework is developed to identify the influence of low
interest rates on managers’ risk-taking incentives proxied by the sensitivity of executive compensation to stock return
volatility (Vega). We examine 1,293 firms in the United States between 2000 and 2016, and the results indicate that low
interest rates increase the managers’ short-term risk-taking incentives and that those incentives contribute to the risk
effectively taken by the firm. Our results are robust to the use of alternative monetary proxies and to the presence of
passive versus active institutional shareholders.
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