Letting go or pushing forward: Director death and firm risk-taking

• DOI: 10.1016/j.lrp.2023.102322
• Publication Date: 2023-04-12T09:33:13Z
• Authors: David H. Weng; Kwang-Ho Kim
• Keywords: Nonconformity; Death anxiety; Sample (material); Affect

We draw on behavioral strategy, terror management, and post traumatic growth theories to examine how a sudden director death may affect firm risk-taking. Two opposing predictions are developed. One is that can trigger anxiety, prompting CEO become less committed his or her job decreasing firm's risk-taking tendency. Alternatively, the passing of evoke reflection, inducing pursue higher-order goals initiate more projects with substantial uncertainties. Results based sample publicly traded firms in United States suggest while diminish long-term investment, this event could fuel strategic nonconformity. Our findings impact strategies be nuanced than existing literature has suggested.