University of Oulu

Amir, E., Kallunki, J.-P., & Nilsson, H. (2014). Criminal convictions and risk taking. Australian Journal of Management, 39(4), 497–523. https://doi.org/10.1177/0312896213513276

Criminal convictions and risk taking

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Author: Amir, Eli1; Kallunki, Juha-Pekka2; Nilsson, Henrik3
Organizations: 1Tel Aviv University and City University of London
2University of Oulu, Department of Accounting
3Stockholm School of Economics
Format: article
Version: accepted version
Access: open
Online Access: PDF Full Text (PDF, 0.5 MB)
Persistent link: http://urn.fi/urn:nbn:fi-fe2021082644457
Language: English
Published: SAGE Publications, 2014
Publish Date: 2021-08-26
Description:

Abstract

An analysis of a proprietary dataset reveals that non-trivial proportions of directors, Chief Executive Officers (CEOs) and Chief Financial Officers in Swedish listed companies have been convicted or suspected of crimes. Based on prior literature, we argue that directors and senior executives who have been convicted or suspected of crimes are more prone to take risk. Consistent with this argument, we find that firms with more criminally convicted/suspected directors and CEOs report more volatile earnings, engage more in goodwill writeoffs due to more unsuccessful acquisitions, and recognize bad news in earnings in a less timely manner. We also find that these firms are, on average, smaller and less profitable. These findings highlight the role personal characteristics of directors and senior management play in managerial decisions.

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Series: Australian journal of management
ISSN: 0312-8962
ISSN-E: 1327-2020
ISSN-L: 0312-8962
Volume: 39
Issue: 4
Pages: 497 - 523
DOI: 10.1177/0312896213513276
OADOI: https://oadoi.org/10.1177/0312896213513276
Type of Publication: A1 Journal article – refereed
Field of Science: 512 Business and management
Subjects:
Copyright information: © 2014 SAGE Publications. The final authenticated version is available online at https://doi.org/10.1177/0312896213513276.