CEO age impact on corporate risk

Prior theoretical work generates conflicting predictions with respect to how CEO age impacts risk-taking behavior. This study looks at 106 firms listed on the Euronext Amsterdam and Brussels stock exchange for the year 2014 to investigate the impact of CEO age on risk taking behavior. Consistent with the prediction that risk-taking behavior decreases as CEOs become older, I document a negative relation between CEO age and stock return volatility. Further analyses reveal that older CEOs reduce firm risk through less risky investment policies such as less investment in R&D. No relation is found between CEO age and operating and financial policies due to insignificance of results.