Impact Of Chief Executive Officer Research Articles

Hometown sentiment: CEO hometown identity and company audit fees

PurposeThe purpose of this study is to examine the impact of chief executive officer (CEO) hometown identity on company audit fees in the Chinese setting.Design/methodology/approachThis study uses data from Chinese public companies in the Shanghai Stock Exchange and the Shenzhen Stock Exchange for the period 2008–2019. This study investigates the impact path of CEO hometown identity on company audit fees and further examines the moderating role of internal and external governance level.FindingsThis study finds that CEO hometown identity is significantly and negatively related to company audit fees. In addition, CEO hometown identity can reduce audit fees by alleviating agency risk and litigation risk. Moreover, the negative effect of CEO hometown identity on audit fees is more pronounced in companies with a higher percentage of institutional investors shareholding and more analysts tracking quantity.Practical implicationsThis study may provide new references for executives’ selection, auditors’ optimization decisions and regulators’ information disclosure system.Originality/valueThis study contributes to the literature by exploring the effect of CEO hometown identity on audit fees in the context of China.

The non-uniform relationship between CEO stock options and strategic risk-taking: the moderating role of firm performance

PurposeThe purpose of this study is to examine the relationship between stock options compensation and firm strategic risk-taking, employing a quantile regression (QR) model. This study aims to analyze whether the impact of stock options on firm strategic risk-taking changes across various quantiles and investigates the moderating role of firm performance.Design/methodology/approachThis study is based on a sample of 90 French firms for the period extending from 2008 to 2019. To deal with the non-uniform association, the authors use a panel quantile method.FindingsThe results reveal that the impact of chief executive officer (CEO) stock options on firm strategic risk-taking varies across risk-taking quantiles. More specifically, the study’s results show a positive association at low quantile levels of strategic risk-taking, measured by research and development (R&D) and a negative linkage at high levels. The authors also find that firm performance moderates the impact of CEO stock options on strategic risk-taking.Research limitations/implicationsThe non-uniform relationship between CEO stock options and firm strategic risk-taking shows that the weight of CEO stock options in the total compensation can be a major determinant of the firm's strategic risk-taking attitude.Originality/valueThis study extends existing research on executive compensation and strategic risk-taking. Thus, this study has the potential to help stakeholders, board of directors and regulators, who are attempting to understand how the compensation contract – in particular, stock option pay – is related to the risk behavior of the agents and guide them to structure the executive compensation in an optimal way.

CEO's age and investment‐cash flow sensitivity

This study examines the impact of Chief Executive Officer's (CEO's) age on investment‐cash flow sensitivity (ICFS) for Indian firms from 2005 to 2018. Using system generalized method of moments (GMM), this study finds that young (older) CEOs increase (reduce) ICFS. This study finds that the effects of CEO's age on ICFS become more (less) stronger for standalone (group‐affiliated) firms and during crisis (noncrisis) periods. Further, the individual effect of older (young) CEOs is negatively (positively) associated with the corporate investment, and this effect is not significant for standalone firms and during the crisis period. Overall, this study adds new insights to the existing finance literature.

Transformational Leadership and Entrepreneurial Orientation: Does Gender Make Difference in The Tunisian SMEs?

Abstract Given the gender gaps in leadership and entrepreneurship fields, the paper aims to examine the impact of Chief Executive Officers’ transformational leadership on firms’ entrepreneurial orientation by examining the moderating role of the gender in the context of Tunisian SMEs. A total of 630 senior managers in 210 Tunisian SMEs (3 respondents per firm) were surveyed using a questionnaire. Partial Least Squares method and Multi-Group Analysis were piloted to test the research hypotheses. The findings demonstrate that the transformational leadership drives entrepreneurial behaviours and managerial attitude towards risk in the Tunisian SMEs. The results show that male managers are more effective than female leaders in fructifying the firm’s entrepreneurial orientation when using the transformational leadership. The findings are congruent with the assumptions of the social-role theory that asserted that the female behaviour is gender stereotypic. Although Tunisian female entrepreneurs are favoured with the supportive legal status, they seem to be less entrepreneurially oriented.

The relationships between CEOs' psychological attributes, top management team behavioral integration and firm performance

PurposeThis study aims to investigate the impact of chief executive officers' (CEO’s) core self-evaluation and grandiose narcissism on firm performance. This work combines bright and dark personality sides to explore how complex CEO's behavioral characteristics affect firms' outcomes. In addition, top management team (TMT) behavioral integration is considered as an organizational setting that acts as a conductive device bridging CEOs behavioral characteristics with firms' performance.Design/methodology/approachThe data for this study are based on 187 respondents, including CEOs and TMTs, across medium and large firms in Turkey through an online survey using a questionnaire. Structural equation modeling (SEM) was used to analyze the data collected.FindingsThe study finds that only CEO-TMT narcissism and TMT behavioral integration have a positive direct effect on firm financial performance. Contrary to expectations, CEO-TMT core self-evaluation has a negative direct effect on firm performance. Moreover, the results show that environmental dynamism interacts positively and significantly with CEO-TMT narcissism. Thus, the claim that TMT behavioral integration has a mediating effect is not supported in the context of medium and large firms in Turkey.Originality/valueThis study contributes to the upper echelons theory (UET) literature by highlighting the boundary conditions under which narcissistic CEOs can interact with more behaviorally integrated TMT members to exchange information, make joint decisions and collaborate in a relatively dynamic environment, as well as aggregating the bright side and dark side of CEOs personality traits and examining their effects alongside those of TMT behavioral integration on the firm performance. Finally, this study enriches the upper echelons literature by providing evidence from Turkey.

What's in an education? Implications of CEO education for financial inclusion

AbstractThis article analyses the impact of chief executive officer's (CEO) educational background, that is, business degree (an MBA) on corporate strategies. In essence, the study tests how differences in educational backgrounds, MBACEOs vis‐à‐vis non‐MBACEOs, determine their strategic choices pertaining to financial inclusion. The study evaluates this relationship in the third‐sector, faith‐based charity organizations (FCOs) context. Using a longitudinal sample of FCOs operating in a developing Muslim‐majority country, this paper reports that CEO's educational background, that is, an MBA degree matters for financial inclusion. These findings demonstrate how CEO's educational background shape the strategic posture of third‐sector organizations such as the FCOs. Additionally, the interaction effects further suggest that MBACEOs derive their imputes from robust sutural positions within the organization such as role duality, founder and internally hired CEO status. Results reported in this study have import economic and policy implications.

Does CEO power influence corporate risk and performance? Evidence from Greece and Hungary

We intend to investigate the impact of chief executive officers’ (CEO) powers on corporate decisions made by firms in the context of board oversight (BO) and market competition (MC). From 2007 to 2017, we applied a quantitative approach to a sample of two stressed European markets (i.e., Hungary and Greece). We found that CEO power has a negative impact on corporate risk and firm performance. Furthermore, results also reveal no sign of moderation effect for MC with corporate decisions, whereas BO moderated the CEO power and corporate decisions in the Hungarian market. However, the results of moderation for the Greek market are diametrically opposed to those of the Hungarian market. Our study indicates that in stressed markets, the CEO power is suppressed and does not increase the corporate risk and firm performance despite the good governance and high market competition. The study can help boards in the optimal delivery of power to the CEO to perform well in a stressed environment

Joint effect of CEO overconfidence and corporate social responsibility discretion on cost of equity capital

The study investigates the joint impact of chief executive officer (CEO) overconfidence and corporate social responsibility (CSR) discretion on firms’ cost of equity capital (CoE). Overconfidence can cause CEOs to underestimate risks and to shift resources from CSR to risky projects. Such a concern could be relieved if investors were to observe the CSR efforts made by overconfident CEOs. This conjecture is empirically supported by the negative CoE effect jointly by CSR scores and CEO overconfidence. The joint effect is distinctive from the negative CoE effect introduced by CSR alone. Further evidence reveals that, for the firms operated by CEOs with greater overconfidence, investors charge lower CoE if CSR activities involve less managerial discretions. When CSR is decomposed into nondiscretionary CSR (NCSR) and discretionary CSR (DCSR) components, CEO overconfidence strengthens the differential CoE effect between the NCSR and DCSR, mainly through the more profound negative CoE impact of NCSR relative to DCSR. Taken together, we find that investors’ perceived risks associated with CEO overconfidence can be alleviated by diverting firm resources to CSR initiatives that have a connection to the firm’s economic factors.

From CEO passion to exploratory and exploitative innovation: the moderating roles of market and technological turbulence

PurposeInnovation has been identified as a critical element to achieve firms' growth. The purpose of this study is to investigate the impact of chief executive officer (CEO) passion on firm innovation, including exploratory and exploitative innovation and examine the moderating roles of market and technological turbulence.Design/methodology/approachThis study adopts the methodology of survey and uses multisource and time-lagged data of 146 firms in China. Seemingly unrelated regression (SUR) is used to test the hypotheses of this study.FindingsThis study finds that CEO passion promotes exploratory and exploitative innovation. Results also indicate that market turbulence strengthens the effect of CEO passion on exploratory and exploitative innovation, whereas technological turbulence weakens such an effect.Originality/valueCEO passion is an important, positive affect which inspires CEOs to work for firms, but it has not yet received enough attention in the innovation literature. This study contributes to examining the impact of CEO passion on firm innovation and contributes to the contingency under which CEO passion influences firm innovation. Furthermore, this research finds that the moderating effects of market and technological turbulence are different in the relationship between CEO passion and firm innovation.

Impact of Chief Executive Officer (CEO) Succession Policy on CEO Turnover Announcement in Malaysia

This paper presents a fresh perspective on chief executive officer (CEO) turnover, where the impact of CEO turnover on firm value is analysed based on whether the removal is planned or unplanned. A total of 146 announcements for ten years in Malaysia is examined using an event study method. The results indicate that, in general, CEO turnover announcements cause a significant reaction due to changes in the firm’s investment decisions. Specifically, a significant positive impact exists when CEO turnover occurs as planned. In a planned turnover, the negative news of the removal of the CEO is immediately minimised with the positive news of a CEO appointment, indicating the positive impact of establishing a CEO succession plan on firm value. This finding adds new knowledge to the current literature and allows policymakers to examine the establishment of a CEO succession policy.

CEO characteristics and bank performance: evidence from India

PurposeThe purpose of this study is to examine the impact of chief executive officer (CEO) personal characteristics on the performance of Indian commercial banks. Additionally, it also analyses the nonlinear relationship of CEO age and CEO tenure on the bank performance.Design/methodology/approachA balanced panel data approach has been used in this study. Particularly, the fixed effect estimation technique is used to examine the relationship between CEO characteristics and bank performance during the period 2009–2010 to 2016–2017.FindingsThe authors find that professional qualification of CEOs in finance stream enhances performance. Additionally, the impact of CEO duality is found to be positive and significant on performance. Male CEOs are beneficial for bank performance. Well experienced CEOs contribute to higher performance. The results are robust across the various proxies of bank performance, and sub-samples based on ownership, size of the bank and board size.Practical implicationsThis study provides insights to policy regulators and policymakers who are entrusted with the appointment of the CEOs in the banks in the light of the ongoing regulatory reforms.Originality/valueThis study can be considered as one of the early studies, which examines the association between CEO characteristics and bank performance from an emerging economy perspective. It also extends the existing study by considering both public and private banks operating in India.

Does CEO compensation matter in boosting firm performance? Evidence from listed French firms

The paper investigates the impact of chief executive officer (CEO) compensation on firm performance from a sample of 155 listed French companies on SBF 120, over 2009–2018. Findings suggest that an increase in CEO compensation seems to improve the accounting‐based firm performance, nevertheless it hurts the firm stock market value. More pronounced results are reported when we control for sector compensation interactions. We argue that attractive compensation may improve the executive services in achieving shareholders' objectives, but investors seem to not appreciate a CEO compensation increase. Based on the agency theory, it might be argued that investors fear possible executive opportunistic behavior encouraging them to enjoy overcompensation.

Chief Executive Officer's traits and open innovation in small and medium enterprises: the mediating role of innovation climate

PurposeThis paper aims to study the impact of Chief Executive Officer's (CEO's) personality traits on open innovation (OI) strategies and the mediating effect of innovation climate by mobilizing the upper echelons theory and the OI literature. In fact, CEO's role in OI promotion has been under-investigated in the literature especially in small and medium-sized enterprises (SMEs) and in developing economies.Design/methodology/approachBased on the structural equation modeling, a survey is scheduled by administrating a questionnaire within 178 CEOs in Tunisian high-tech sector. The relevance of the empirical evidences is to disclose human levers to the success of OI strategies in the Tunisian context as a developing country.FindingsThe results show the importance of CEO's entrepreneurial orientation (EO) and attitude in promoting innovation climate and so then OI strategies. The study offers a reading grid for managers of high-tech SMEs to better lead and identify key factors for OI adoption. Innovative climate is found to be a relevant driver of OI encompassing the key role of attitude and EO of top managers.Practical implicationsResults highlight the relevance of the recruitment of appropriate top managers with high levels of EO and with positive attitude toward OI in order to facilitate OI integration and to enhance SMEs' competitiveness. Entrepreneurially oriented CEOs should be required in order to overcome "Not Invented Here" and "Not Shared Here" syndromes, to support innovative climate and to encourage knowledge import and export in the Tunisian SMEs.Originality/valueThis paper sheds light on the micro-foundation of OI by emphasizing the relevance of human factors and namely EO and attitude of CEOs in OI issue. It provides conceptual and empirical clarification of the extent to which CEO's traits affect OI through innovative climate. This would value initiatives exploring key individual's characteristics influence on OI strategies within SMEs.

PENGARUH GENDER CHIEF EXECUTIVE OFFICER (CEO), FINANCIAL EXPERTISE CEO, GENDER KOMITE AUDIT, FINANCIAL EXPERTISE KOMITE AUDIT DAN UKURAN KOMITE AUDIT TERHADAP AUDIT DELAY PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BEI PERIODE 2015-2017

This research examines the impact of chief executive officer (CEO) gender, CEO financial expertise, audit committee gender, audit committee financial expertise, and audit committee size on audit delay. The population in this research are the manufacturing companies listed in Indonesia Stock Exchange for period of 2015-2017. The samples in this research study using purposive sampling method, which the number of observations are 39 studies. The technique of data analysis is using multiple linear regression analysis.The result of this research show that CEO gender, CEO financial expertise, audit committee gender, audit committee financial expertise, and audit committee size have affect on audit delay. Partially the research show that (1) CEO gender has an effect on audit delay, (2) the CEO's financial expertise has an effect on the audit delay, (3) the gender audit committee has no effect on audit delay, (4) the financial expertise of the audit committee has no effect on the audit delay, (5) the size of the audit committee influences audit delay.

CEO characteristics and earnings management: empirical evidence from France

PurposeThe purpose of this paper is to investigate the impact of chief executive officer (CEO) characteristics on the earnings management examined by the discretionary accruals.Design/methodology/approachThe sample includes 151 French firms listed on the CAC ALL shares index from 2006 to 2015. The paper uses the feasible generalized least square regression technique to test the relationship between CEO characteristics and earnings management.FindingsUsing discretionary accruals as a proxy for earnings management, the results obtained from the three models (Jones modified 1995; Kothariet al., 2005; Raman and Shahrur, 2008) indicated that there is a positive and significant relationship between CEO duality, CEO nationality and the quality of financial communication. However, no significant relationship was found between CEO board member, CEO turnover and earnings management.Originality/valueA literature review finds that fewer studies have investigated the relationship between earnings management practices and personal CEO characteristics in the French context. Furthermore, no study yet has examined the influence of CEO nationality and CEO age on earnings management practices. This study provides empirical data about the impact of CEO’s characteristics on earnings management and how these different characteristics can facilitate the transition to manipulate and influence the quality of financial communication.

Strategic agility orientation? The impact of CEO duality on corporate entrepreneurship in privatized Vietnamese firms

This study examines the impact of chief executive officer (CEO) duality (a chief executive operating chair of board and leader of a firm) of newly privatized Vietnamese firms on the level of corporate entrepreneurship; this understanding is used to throw light on the extent to which a position of strategic agility is achieved. Specifically, does CEO duality enable firms to keep consistent with their vision, while remaining flexible in their business model? Data from a survey of 114 CEOs of board and top management team members in privatized firms in Vietnam were collected and examined through a combination of agency theory and stewardship theory. The research finds that CEO duality does not necessarily lead to a higher degree of entrepreneurial activity in privatized Vietnamese firms. The results have policy implications for shaping corporate governance and management implications for firms striving to be competitive, in ways that advance corporate entrepreneurship in economies such as Vietnam that are both emerging and pursuing privatization.

Chief executive officer attributes, sustainable performance, environmental performance, and environmental reporting: New insights from upper echelons perspective

AbstractThis study examines the impact of chief executive officer (CEO) attributes on sustainable performance, environmental performance, and environmental reporting, which are motivated by institutionally driven environmental policies, regulations, and management in the context of Chinese listed firms. With the use of a comprehensive dataset of 2,854 Chinese listed firms over the 2010–2017 period (i.e., making over 16,000 individual firm‐year observations), our findings are fourfold. First, our overall findings reveal that CEOs with research background tend to engage more in activities that improve sustainable performance, environmental performance, and environmental reporting than do those without research background. Second, CEOs with financial expertise are positively linked with increased sustainable performance and environmental reporting. Third, CEOs with foreign exposure are more eager to engage in activities that enhance sustainable and environmental performance than do those without foreign exposure. Fourth, young CEOs tend to take actions that reduce both sustainable and environmental performance than do their older counterparts. We interpret our results within upper echelons theoretical perspective. The results are robust to alternative measures, potential endogeneities, and sample selection problems.

CEO power and corporate social responsibility

PurposeThe purpose of this paper is to examine the impact of chief executive officer (CEO) power on corporate social responsibility (CSR) performance.Design/methodology/approachThe authors use regression analysis to investigate the research question.FindingsUsing a 23-year panel sample with 1,574 unique US firms and 8,575 firm-year observations, the authors find a significant and negative relation between CEO power and CSR, suggesting that firms with more powerful CEOs engage in less CSR activities.Originality/valueThe results reveal that more powerful CEOs become less responsive to the needs of stakeholder groups, confirming the validity of the stakeholder theory of CSR.

A comparative study of HR involvement in strategic decision-making in China and Australia

PurposeThe purpose of this paper is to address gaps in the knowledge about human resource (HR) professional involvement in strategic decision-making in China compared with that in Australia.Design/methodology/approachFirst, the authors compare the strategic involvement of Chinese and Australian HR professionals. Second, based on the upper echelon theory, the authors compare the impact of chief executive officer (CEO) and top management team (TMT) between both countries on HR involvement in strategic decision-making. Data were collected from matched pairs of HR and TMT executives in China (n = 168) and in Australia (n = 102).FindingsResults indicate a difference, despite of no statistical significance, in HR involvement in strategic decision-making between Chinese and Australian samples. TMT behavioural integration was positively related to HR involvement in strategic decision-making in a collectivistic culture (i.e. in China), but not in an individualistic culture (i.e. in Australia). However, CEO support for HRM was positively related to HR involvement in strategic decision-making in Australia, whereas it is not related in China.Originality/valueThe paper conducts a comparative study and practical, and research implications are discussed at the end.

The relationship between CEO personal power, CEO competencies, and company performance

This article examines the impact of chief executive officer (CEO) power (formal and informal) on company performance and investigates the relationship between the CEO’s power and the company’s financial performance: share price performance, return on assets (ROA), and Tobin’s Q. The research employed both primary and secondary data. A questionnaire collected data from 391 professionals (respondents) in the market and comprised two scales, one adapted from existing research on personal competencies of directors and the second on CEO personal power dimension and demographics. Seven hypotheses were tested. Seven were supported for share price performance, four for ROA and three for Tobin’s Q. The CEO’s is a key role in general management, probably the most important. This is the only study found in the extant literature, which investigates the links between CEO power, competencies, and company performance. It identifies some of the most important characteristics of the effective CEO.