Decision Orientation of CEO Education and CEO Risk-Taking: The Moderating Effect of EPU
DOI:
https://doi.org/10.37134/jcit.vol15.1.9a.2025Keywords:
CEO education, Risk-taking, Economic policy uncertaintyAbstract
This thesis examines how CEO decision orientation, shaped by educational background, impacts corporate risk-taking. This study covers data from 3,083 firm-year observations of companies listed on the Malaysia Stock Exchange from 2015 to 2021. The study explores the decision orientations logical and intuitive and hypothesizes that logical CEOs would take on higher risks due to their structured, analytical approach. However, empirical findings indicate that logical CEOs are generally more risk-averse, preferring lower leverage and higher liquidity. Whereas, during periods of high uncertainty, measured by Economic Policy Uncertainty (EPU), logical CEOs demonstrate a mixed response while increasing leverage while other risk measures remain unchanged. The thesis also extends to assess whether cognitive complexity (categorized as Analytical or Conceptual) influences corporate risk-taking. The results show no significant link between cognitive complexity and risk-taking behaviour, suggesting that cognitive complexity alone may not be a major determinant of risk-taking.
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