We present a dynamic model of corporate risk management and managerial career concerns. We show that managers with high (low) career concerns are more likely to speculate (hedge) early in their careers. In the later stage of their careers when managers have less career concerns, there is no speculative motive for self interested managers. On the other hand, managers with minimal career concerns engage in neither hedging nor speculation early in their careers, but they may choose to hedge after poor early performance.
Nam, Jouahn; Wang, Jun; and Zhang, Ge, "Managerial Career Concerns and Risk Management" (2005). Department of Economics and Finance Working Papers, 1991-2006. Paper 42.