Corporate risk culture

Yihui Pan, Stephan Siegel, Tracy Yue Wang

Research output: Contribution to journalArticlepeer-review

22 Scopus citations


We examine the formation and evolution of corporate risk culture, that is, the preferences toward risk and uncertainty shared by a firm's leaders, as well as its effect on corporate policies. We document persistent commonality in risk attitudes inside firms, which arises through the selection of leaders with similar preferences and is rooted in the founders' risk attitudes. Changes in corporate risk culture over time affect corporate investment policies, whereas cross-sectional differences in founders' risk attitudes, that is, firms' initial risk culture, contribute to differences across firms in persistent firm policies, such as research and development intensity.

Original languageEnglish (US)
Pages (from-to)2327-2367
Number of pages41
JournalJournal of Financial and Quantitative Analysis
Issue number6
StatePublished - Dec 1 2017
Externally publishedYes

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