6. Additional Analysis
Based on my main result, it is reasonable to believe that CEOs with more conservative Chinese zodiacs are less risky and CEOs with more conservative
constellation signs prefer more conservative firm policies. In this section, I would like to further analyze whether my main results are driven by firms in the high-tech
industry. Research has shown that CEO characteristics can systematically vary by industry (Rajagopolan and Datta, 1996) and that firms in high-technology industries certainly have different CEO profiles than firms in low-technology industries (Hambrick et al., 1992). According to Kile and Phillips (2009), I use three-digit SIC code to distinguish high-tech firms from non-high-tech firms.2
The relationship between conservative Chinese zodiac and corporate risk and between conservative Chinese zodiac and firm policies within high-tech industry are reported in Table 7. The relationship between conservative Chinese zodiac and corporate risk and between conservative Chinese zodiac and firm policies within non-high-tech industry are reported in Table 8. The relationship between conservative constellation and corporate risk and between conservative constellation and firm policies within high-tech industry are reported in Table 9. The relationship between conservative constellation and corporate risk and between conservative constellation and firm policies within non-high-tech industry are reported in Table 10.
On the basis of Table 7 and Table 8, I find out that the result is consistent with my main Chinese zodiac result, and that CEOs with more conservative Chinese zodiacs prefer less risk and more conservative firm policies. The result indicates that
2 Three-digit SIC codes of high-tech firms include 261, 272, 282 , 283, 284, 286, 287, 289, 351, 352, 353, 354, 355, 356, 357 , 358, 359, 360, 361, 362, 363, 364, 365, 366, 367, 369, 371, 372, 373, 374, 375, 376, 377, 378, 379, 381, 382, 384, 387, 481, 482, 489, 491, 492, 493, 573, 737, 762, 781, 783, 791, 871 and 873.
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my main result from Table 5 is mainly driven by firms in the high-tech industry.
Furthermore, based on Table 9 and Table 10, the result is consistent with my main result showing that CEOs with more conservative constellation signs prefer more conservative firm policies. Similar to Chinese zodiac result, the result from Table 9 and Table 10 indicates that my main result is mostly composed of firms in the high-tech industry. Prior research has shown that CEOs from high-high-tech industry have much influence on firm policies and corporate risk and this result also confirms the idea that CEO’s Chinese zodiac and constellation has influence on corporate risk and firm policies within high-tech industry.
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Table 7 Regressions of conservative Chinese zodiac and corporate risk and firm policies within high-tech industry
Panel A: Conservative Chinese zodiac and corporate risk in the high-tech industry Dependent Variable: Corporate risk measures
SD_RET SD_∆ROA
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Panel B: Conservative Chinese zodiac and firm policies in the high-tech industry Dependent Variable: Firm policy measures
R&D CAPEX
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Notes: SD_RET is the standard deviation of monthly CRSP stock returns over the 12 months starting from the fifth month after fiscal year-end. SD_∆ROA is the standard deviation of seasonally differenced quarterly accounting return on assets over the subsequent three years for the period 2000-2016. R&D is research and development expense scaled by total assets in year t+1. CAPEX is capital
expenditures scaled by total assets in year t+1. Zod_Conserv is is the dummy variable measured as an indicator variable equal to one if CEO’s Chinese zodiac is “Tiger”,
“Rabbit”, “Snake”, “Dog”, or “Pig”. Numbers in parentheses are p-values. ***, **, and * indicate statistical significance at the 1%, 5% and 10% levels, respectively, using a two-tailed test.
Table 8 Regressions of conservative Chinese zodiac and corporate risk and firm policies within non-high-tech industry
Panel A: Conservative Chinese zodiac and corporate risk in the non-high-tech industry
Dependent Variable: Corporate risk measures
SD_RET SD_∆ROA
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Panel B: Conservative Chinese zodiac and firm policies in the non-high-tech industry Dependent Variable: Firm policy measures
R&D CAPEX
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Notes: SD_RET is the standard deviation of monthly CRSP stock returns over the 12 months starting from the fifth month after fiscal year-end. SD_∆ROA is the standard deviation of seasonally differenced quarterly accounting return on assets over the subsequent three years for the period 2000-2016. R&D is research and development expense scaled by total assets in year t+1. CAPEX is capital
expenditures scaled by total assets in year t+1. Zod_Conserv is is the dummy variable measured as an indicator variable equal to one if CEO’s Chinese zodiac is “Tiger”,
“Rabbit”, “Snake”, “Dog”, or “Pig”. Numbers in parentheses are p-values. ***, **, and * indicate statistical significance at the 1%, 5% and 10% levels, respectively, using a two-tailed test.
Table 9 Regressions of conservative constellation and corporate risk and firm policies in the high-tech industry
Panel A: Conservative constellation and corporate risk in the high-tech industry Dependent Variable: Corporate risk measures
SD_RET SD_∆ROA
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Panel B: Conservative constellation and firm policies in the high-tech industry Dependent Variable: Firm policy measures
R&D CAPEX
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Notes: SD_RET is the standard deviation of monthly CRSP stock returns over the 12 months starting from the fifth month after fiscal year-end. SD_∆ROA is the standard deviation of seasonally differenced quarterly accounting return on assets over the subsequent three years for the period 2000-2016. R&D is research and development expense scaled by total assets in year t+1. CAPEX is capital
expenditures scaled by total assets in year t+1. C_Conserv is the dummy variable measured as an indicator variable equal to one if CEO’s constellation belongs to earth element and water element. Numbers in parentheses are p-values. ***, **, and * indicate statistical significance at the 1%, 5% and 10% levels, respectively, using a two-tailed test.
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Table 10 Regressions of conservative constellation and corporate risk and firm policies in the non-high-tech industry
Panel A: Conservative constellation and corporate risk in the non-high-tech industry Dependent Variable: Corporate risk measures
SD_RET SD_∆ROA
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Panel B: Conservative constellation and firm policies in the non-high-tech industry Dependent Variable: Firm policy measures
R&D CAPEX
Notes: SD_RET is the standard deviation of monthly CRSP stock returns over the 12 months starting from the fifth month after fiscal year-end. SD_∆ROA is the standard deviation of seasonally differenced quarterly accounting return on assets
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國立 政 治 大 學
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N a tio na
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over the subsequent three years for the period 2000-2016. R&D is research and development expense scaled by total assets in year t+1. CAPEX is capital
expenditures scaled by total assets in year t+1. C_Conserv is the dummy variable measured as an indicator variable equal to one if CEO’s constellation belongs to earth element and water element. Numbers in parentheses are p-values. ***, **, and * indicate statistical significance at the 1%, 5% and 10% levels, respectively, using a two-tailed test.
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國立 政 治 大 學