Are Academic Leaders Less Aggressive? Evidence from Corporate Expansion

Abstract

ABSTRACT Using a sample of 2406 Chinese listed firms among which 491 have scholar chairmen, we find that compared with the firms without scholar chairmen, those with scholar chairmen are less likely to overinvest, less acquisitive, and the firms tend to hold more cash and less leverage. These results suggest that corporate leaders with academic work experience are less aggressive. These results remain robust after we utilize alternative proxies to measure chairmen’s academic achievements, and we use the number of top universities (Project 985/211 University) in the firm’s head-quarter province as the instrument for identification. Overall, this paper helps us better understand the role of academic leadership in corporate governance.