Do CEOs Who Trade Shares Adopt More Aggressive Corporate Investment Strategies?

This paper investigates whether trading behavior of CEOs impacts the levels of corporate investment. Prior studies show that individuals who trade on the stock market are less financially conservative. We find that this behavioural attribute is consistent over both the individual and corporate domain. Corporations with trading CEOs have higher capital expenditure and make significantly more acquisitions, and CEOs with higher portfolio turnover engage in riskier forms of corporate investment. We contribute to the literature by enhancing the current understanding of what key attributes and traits motivate CEOs to engage in corporate investment