CEO duality and firm performance: Evidence from an exogenous shock to the competitive environment

Tina Yang; Shan Zhao

doi:10.1016/j.jbankfin.2014.04.008

CEO duality and firm performance : Evidence from an exogenous shock to the competitive environment

Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review

Overview

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Author(s)

Tina Yang
Shan Zhao

Detail(s)

Original language	English
Pages (from-to)	534-552
Journal / Publication	Journal of Banking and Finance
Volume	49
Online published	24 Apr 2014
Publication status	Published - Dec 2014
Externally published	Yes

Link(s)

DOI	DOI https://doi.org/10.1016/j.jbankfin.2014.04.008 Final Published version
	Check@CityULib
Link to Scopus	https://www.scopus.com/record/display.uri?eid=2-s2.0-84922318680&origin=recordpage
Permanent Link	https://scholars.cityu.edu.hk/en/publications/publication(5c28c729-3213-4960-b62a-1d51ace6e932).html

Abstract

Regulators and governance activists are pressuring firms to abolish CEO duality (the Chief Executive Officer is also the Chairman of the Board). However, the literature provides mixed evidence on the relation between CEO duality and firm performance. Using the exogenous shock of the 1989 Canada-United States Free Trade Agreement, we find that duality firms outperform non-duality firms by 3-4% when their competitive environments change. Further, the performance difference is larger for firms with higher information costs and better corporate governance. Our results underscore the benefits of CEO duality in saving information costs and making speedy decisions.

Research Area(s)

CEO duality, Competitive environments, Corporate governance, Endogeneity, Firm performance

Citation Format(s)

[ RIS ] [ BibTeX ]

CEO duality and firm performance : Evidence from an exogenous shock to the competitive environment. / Yang, Tina; Zhao, Shan.

In: Journal of Banking and Finance, Vol. 49, 12.2014, p. 534-552.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review

Yang, T & Zhao, S 2014, 'CEO duality and firm performance: Evidence from an exogenous shock to the competitive environment', Journal of Banking and Finance, vol. 49, pp. 534-552. https://doi.org/10.1016/j.jbankfin.2014.04.008

Yang, T., & Zhao, S. (2014). CEO duality and firm performance: Evidence from an exogenous shock to the competitive environment. Journal of Banking and Finance, 49, 534-552. https://doi.org/10.1016/j.jbankfin.2014.04.008

Yang T, Zhao S. CEO duality and firm performance: Evidence from an exogenous shock to the competitive environment. Journal of Banking and Finance. 2014 Dec;49:534-552. https://doi.org/10.1016/j.jbankfin.2014.04.008

Yang, Tina ; Zhao, Shan. / CEO duality and firm performance : Evidence from an exogenous shock to the competitive environment. In: Journal of Banking and Finance. 2014 ; Vol. 49. pp. 534-552.