Abstract
This study investigates the nonlinear relationship between CEO demission threats and corporate risk-taking levels. We first estimate the degree of CEO demission threats and then examine how CEO demission threats affect the level of corporate risk-taking. Using data from China's A-share listed companies from 2007 to 2017, we find that the nonlinear relationship can be represented by an inverted “U” in which moderate CEO demission threats increase the level of corporate risk-taking; however, imminent demission threats to CEOs reduce their level of corporate risk-taking. Further evidence demonstrates that the state-owned attributes of companies weaken the effect of the CEO demission threat on corporate risk-taking and that the eastern attributes of companies strengthen the effect of the CEO demission threat on corporate risk-taking. This study extends the relevant research on CEO demission threat and corporate risk-taking and provides great inspiration for CEOs’ business decision-making and corporate sustainable development.
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