Masculinity, Testosterone, and Financial Misreporting

We examine the relation between a measure of male CEOs' facial masculinity and financial misreporting. Facial masculinity is associated with a complex of masculine behaviors (including aggression, egocentrism, riskseeking, and maintenance of social status) in males. One possible mechanism for t...

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Veröffentlicht in:Journal of accounting research Jg. 52; H. 5; S. 1195 - 1246
Hauptverfasser: JIA, YUPING, LENT, LAURENCE VAN, ZENG, YACHANG
Format: Journal Article
Sprache:Englisch
Veröffentlicht: Chicago Blackwell Publishing Ltd 01.12.2014
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Schlagworte:
Aggression
Analysis
Behavior
Chief executive officers
Chief executives
Confidence
Descriptive statistics
Egocentrism
Enforcement
Executives (Business)
Face
facial masculinity
Financial reporting
Financial risk
Human aggression
Insider trading
Logistic regression
M12
M20
M41
M50
Males
Masculinity
misreporting
Naming
Opportunistic behavior
option backdating
Social classes
Social development
Social status
Statistical median
Studies
Testosterone
ISSN:0021-8456, 1475-679X
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Zusammenfassung:We examine the relation between a measure of male CEOs' facial masculinity and financial misreporting. Facial masculinity is associated with a complex of masculine behaviors (including aggression, egocentrism, riskseeking, and maintenance of social status) in males. One possible mechanism for this relation is that the hormone testosterone influences both behavior and the development of the face shape. We document a positive association between CEO facial masculinity and various misreporting proxies in a broad sample of S&P1500 firms during 1996–2010. We complement this evidence by documenting that a CEO's facial masculinity predicts his firm's likelihood of being subject to an SEC enforcement action. We also show that an executive's facial masculinity is associated with the likelihood of the SEC naming him as a perpetrator. We find that facial masculinity is not a measure of overconfidence. Finally, we demonstrate that facial masculinity also predicts the incidence of insider trading and option backdating.
Bibliographie:ArticleID:JOAR12065
istex:FFFCDAD5DA62B1126C05A5014DE37A2DE243F54D
ark:/67375/WNG-PG9WTKDF-9
http://research.chicagobooth.edu/arc/journal‐of‐accounting‐research/online‐supplements
Accepted by Christian Leuz. We thank Wenjiao (Amanda) Cao, Sujie Chen, Michael Geulen, Anne Koning, Moritz Kostrzewa, Gita Lieuw, Willem Mobach, Mitzi Perez Padilla, Tetiana Shevchenko, Violeta Shtereva, and Fei Wang for their help in collecting the data. We thank the Center for Accounting Research and Education at Notre Dame for providing us with the data on SEC enforcement releases. We benefited from feedback from Shane Dikolli, Igor Goncharov, Kelvin Law, Max Mueller, Bill Mayew, Cheryl McCormick, Valeri Nikolaev, Per Olsson, Thorsten Sellhorn, as well as from workshop participants at Duke, ESSEC Singapore, LMU, Tilburg, the Frankfurt School of Finance and Management, the University of Melbourne, University of Queensland, VU University Amsterdam, WHU, and the 2012 European Accounting Association Annual Meeting. We are also grateful for the constructive comments by three anonymous reviewers. This study was approved by the Frankfurt School of Finance and Management Research Ethics Committee. An Online Appendix to this paper can be downloaded at
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ISSN:0021-8456
1475-679X
DOI:10.1111/1475-679X.12065