Does Founder CEO Status Affect Firm Risk Taking

Grounded in the strategic leadership literature and upper echelons theory, this study proposes that founder CEOs tend to take more risks than agent CEOs because of the former's overconfidence. We further suggest that the relationship between founder CEO status and firm risk taking can be moderated by certain internal or external factors that influence just how overconfident a CEO might be. Our theoretical predictions are well supported by a large survey data set on Chinese CEOs. Specifically, the positive relationship between founder CEO status and firm risk taking weakens when the CEO is younger, when the CEO also chairs the board of directors, and when the CEO's task environment is less uncertain, less complex, and more munificent.