Do CEOs' Industry Tournament Incentives Affect Stock Liquidity?
研究美国CEO行业锦标赛激励对股票流动性的影响，发现激励越强，股票流动性越高，且该效应在信息不对称严重时更强，在公司治理良好时更弱。
ABSTRACT Research Question/Issue We examine the relationship between CEOs' industry tournament incentives (CITI) and stock liquidity in the United States. We also examine if the effect of CITI on stock liquidity varies depending on the information‐asymmetry and corporate governance mechanisms. Research Findings/Insights We find that firms with stronger CITI are associated with greater stock liquidity. Exploiting the enforceability of executive noncompetition agreements across the states in the United States as a quasi‐natural experiment, we find that firms headquartered in states that introduce these agreements on average experience lower stock liquidity, suggesting a causal relation. We also find that the effect of CITI on stock liquidity is stronger among firms with severe information‐asymmetry problems, but weaker among firms with strong governance mechanisms. Theoretical/Academic Implications We extend research that examines the impacts of CEO industry tournament incentives on corporate outcomes and strategies. Our paper shows that CEO industry tournament incentives matter for stock liquidity. Our paper contributes to a large literature on the roles of CEO styles and behaviors in shaping corporate policies. Practitioner/Policy Implications Our findings have several practical implications for investors, policymakers, and financial analysts. For example, our findings can help investors better understand how CEOs' compensation‐based incentives impact stock liquidity. Similarly, policymakers can use our findings to design policies that encourage CEOs to act in the best interest of their shareholders and promote market efficiency.