CEO duality and firm performance in the U.S. restaurant industry: Moderating role of restaurant type

Abstract

This study explores the influences of CEOs’ dual roles (CEO duality) on firm performance, specifically in the U.S. restaurant context based on the stewardship theory. The study's preliminary examination investigates the main effect of CEO duality on restaurants’ financial performances. Next, the research tests the primary hypothesis of a moderating effect of restaurant type on the relationship between CEO duality and firm performance. More specifically, this study proposes that CEO duality has greater positive effects for full-service restaurants than quick-service restaurants. Findings of this study suggest that CEO duality, in general, contributes to restaurants’ improving performances and also support the proposed moderating effect on the relationship between CEO duality and firm performance. By incorporating the restaurant industry's idiosyncratic characteristics into the CEO duality argument and the restaurant type into the model, this study makes unique contributions to the general governance literature.