Why Are Successive Cohorts of Listed Firms Persistently Riskier?

abstract

• 2016 John Wiley & Sons, Ltd. Prior studies show that the risk level of each new cohort of listed firms is higher than its predecessor's. We find that these risk differences are persistent and investigate two potential explanations: (1) Each cohort adopts and retains operating innovations that are associated with higher risks, and (2) increasing numbers of younger and less-experienced firms are represented in each new cohort. Our results support the first explanation. Each new cohort uses riskier production technologies and operates in more competitive product markets than its predecessor.

authors

• Tse, Senyo

published proceedings

• EUROPEAN FINANCIAL MANAGEMENT

author list (cited authors)

• Srivastava, A., & Tse, S. Y.

citation count

• 12

complete list of authors

• Srivastava, Anup||Tse, Senyo Y

publication date

• November 2016

publisher

• Wiley  Publisher

published in

• European Financial Management  Journal

keywords

• Earnings Volatility
• Idiosyncratic Risk
• Intangible Investments
• Product Market Uncertainty

Digital Object Identifier (DOI)

• 10.1111/eufm.12087

start page

• 957

end page

• 1000

volume

• 22

issue

• 5

URL

• http%3A%2F%2Fdx.doi.org%2F10.1111%2Feufm.12087