CEO outsiderness and firm performance in an emerging economy: The moderating role of managerial discretion

2018 ◽  
Vol 26 (5) ◽  
pp. 798-814
Author(s):  
Aylin Ataay
Keyword(s):  
Firm Performance ◽  
Chief Executive ◽  
Emerging Economy ◽  
Managerial Discretion ◽  
Ceo Succession ◽  
Direct Impact ◽  
And Performance ◽  
Succession Events ◽  
Moderating Role

AbstractInconsistent findings from prior research on the performance consequences of new Chief Executive Officer (CEO) origin led us to study the moderating effect of managerial discretion on the link between CEO outsiderness and firms’ post-succession performance. Data from 75 CEO succession events from an emerging economy show that new CEO outsiderness, without managerial discretion context influences, has no direct impact on post-succession performance. Further, our findings emphasise the moderating impacts of managerial discretion, stemming from factors in a company’s external and internal contingencies, which either strengthen or weaken the association between new CEO outsiderness and post-succession firm performance. It is found that market complexity, but not munificence, provides CEOs with more discretion in the Turkish context, thus strengthening the positive associations between CEO origin and firm performance. Firms inertia weakens both managerial discretion level and the association between CEO outsiderness and firm performance. The results show that internal corporate governance also matters. Finally, when a CEO assumes the dual role of both the chairman and the CEO, the link between CEO outsiderness and performance of the firm becomes stronger.

scholarly journals Moderating role of productivity on diversified conglomerates and performance: the case of Malaysia

2017 ◽  
Vol 9 (2) ◽  
pp. 118-133 ◽  
Author(s):  
Alex Kwaku Gyan
Keyword(s):  
Firm Performance ◽  
Content Type ◽  
Industrial Diversification ◽  
And Performance ◽  
Diversified Firms ◽  
The Relationship ◽  
Subsequent Modification ◽  
Moderating Role ◽  
Significant Moderator

Purpose The purpose of this paper is to investigate the previous mixed findings in the relationship between diversification and firm performance. Using international and industrial conglomerates, the paper introduces productivity as a moderating variable to ascertain whether the mixed views in the diversification-performance nexus is due to variations in productivity. The findings in both proxies of performance (q and return on asset (ROA)) show that productivity is not a significant moderator in the diversification-performance link, except that under industrial conglomerates productivity enhances ROAs significantly. Meanwhile, the results show that diversification either has no significant value on firm performance or relates negatively with performance – a contrasting result to the hypothesis of this study. Design/methodology/approach This study adopts diversification measurement, categorisation approach and the methodology used in the work of Fauver et al. (2004) and the subsequent modification by Lee et al. (2012). This study, however, investigates the moderating effect of productivity on diversified firms and not ownership as shown in the previous studies. Performance is measured by two proxies to show robustness of the study. ROA is an accounting tool and Tobin’s q reflects a market-based performance of the firm. Findings The results show that productivity has no moderating impact on a market-based performance of a diversified firm. Regarding ROA, results show a split in finding by showing that productivity has no significant impact on international diversification; however, for industrial diversification, results show significant impact. Originality/value The paper adds to knowledge of finance by ruling out the view that the inconsistencies in the diversification and performance nexus in emerging economies could be due to vagaries in productivity. It is confirmed that productivity technically does not strengthen the link between diversification and performance: suggesting that factors other than productivity could establish a maximal impact on that link to minimise the inconsistencies in the findings on diversification-performance link.

scholarly journals Does Structural Power Matter? Board Attributes and Firm Performance

2020 ◽  
Vol 3 (5) ◽  
pp. 54-64
Author(s):  
Fiona Jepkosgei Korir ◽  
Joel K Tenai
Keyword(s):  
Firm Performance ◽  
Longitudinal Research ◽  
Chief Executive ◽  
Listed Firms ◽  
Longitudinal Research Design ◽  
Regulatory Bodies ◽  
The Relationship ◽  
Moderating Role ◽  
Practical Implications

Purpose- The study investigates the moderating role of Chief Executive Officer Duality onboard attributes and firm performance of companies listed in Kenya. Design/Methodology- The research used a longitudinal research design. Panel data were derived from published accounts for sixteen years that is from 2002-2017. IGLS regression models were used to test the hypothesis. Findings- The empirical results indicated that the independence of the board, the size of the board, and the duration in which the board member served the organization positively influence the firm performance. However, CEO duality does not moderate the relationship. Practical Implications- Regulatory bodies such as NSE and CMA in Kenya should ensure that listed firms have more independent directors serving a board, ensure a reasonable size of the board and increase the board tenure to enhance firm performance. Further, the combined roles of the CEO and chairman may not influence the efficiency of the board in the Kenyan context.

scholarly journals Institutional Ownership Board Characteristics and Firm Performance

2021 ◽  
Vol 12 (2) ◽  
pp. 1-15
Author(s):  
Abdul Waheed ◽  
Qaisar Ali Malik
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Financial Institutions ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Dynamic Panel Data ◽  
Performance Variables ◽  
And Performance ◽  
Moderating Role

This research study attempts to investigate the moderating role of financial institutions with corporate governance and firm performance variables in the light of a purposely developed contingent theoretical framework. The current study analyzed an unbalanced panel of 287 non-financial sector firms listed on Pakistan Stock Exchange (PSX) from 2005 to 2015 by using the technique Arellano-Bond dynamic panel-data estimation under assumptions of generalized methods of moments (GMM). The contingency framework proposed in this study confirmed the moderating role of financial institutions in corporate governance and performance variables. Empirical evidence revealed that higher level of institutional ownership in firm's ownership structure although discourages the large size board but encourages higher ratio of independent directors in the governing body. To the best of the authors' knowledge, the current study provides a deeper understanding regarding the role of financial institutions in corporate governance and performance mechanism particularly in the context of Pakistani emerging economy.

scholarly journals Divestiture strategy, CEO power and firm performance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rayenda Khresna Brahmana ◽  
Hui-Wei You ◽  
Xhin-Rong Yong
Keyword(s):  
Firm Performance ◽  
Generalized Method Of Moments ◽  
Strategic Decision ◽  
Ceo Power ◽  
Content Type ◽  
And Performance ◽  
The Impact ◽  
The Relationship ◽  
Moderating Role

Purpose This study aims to examine the moderating role of chief executive officer (CEO) power on the relationship between divestiture strategy and firm performance by framing the relationship under the agency and power circulation theories. Design/methodology/approach This study focuses on a sample of 319 non-financial public-listed companies in Malaysia from the year 2012–2016 and estimates the model under two-step generalized method of moments panel regression to eliminate the endogeneity issue. Findings The results show that divestiture strategy decreased the firm performance. Meanwhile, greater CEO power changed that divestiture effect but still failed to increase the performance. This study also indicates the CEO power strengthens the relationship between firm performance and divestiture. Research limitations/implications The overall findings show that the positive moderating role of CEO power on the relationship between divestiture and performance. This research confirmed the agency and power circulation theories by showing that CEO power can make divestiture strategy works. However, the moderating plot tells different. CEO power may strengthen the relationship between divestiture and performance; it fails to boost up the performance in overall. Therefore, this study is about CEO power on the strategic decision and gives a good implication for corporate governance concerning the impact of CEO power on the organization’s alignment process. Originality/value This study examines the effect of CEO power on the performance of divestiture strategy implementation by contesting the agency and power circulation theories within an emerging country context.

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