Pan, Yihui; Wang, Tracy Yue; Weisbach, Michael S. - 2013
This paper documents the existence of a CEO Investment Cycle, in which disinvestment decreases over CEO tenure while … investment increases, leading to “cyclical” firm growth in assets as well as in employment. The estimated variation in investment … constraints. This investment cycle appears to reflect CEOs' preference for investment growth, which leads to increasing investment …