The politician as a CEO, corporate governance and firm value

Qazi Awais Amin; Douglas Cumming

doi:10.1016/j.intfin.2023.101804

The politician as a CEO, corporate governance and firm value

Qazi Awais Amin
, Douglas Cumming

School of Business

Nottingham Trent University

Research output: Contribution to journal › Article › peer-review

7 Scopus citations

Abstract

Using a data set of two important emerging markets namely Taiwan and Pakistan, we investigate an unexplored dynamic of the top leadership i.e. the politician as a CEO and determine their impact on firm value. We show that the presence of the powerful politician as a CEO tends to limit the board power and endorse managerial entrenchment i.e. put their self-interests ahead of the firm's goals, which in turn, damage the firms’ value. We find a significant negative moderating effect of the political CEOs on the relationship of concentrated ownership, board independence and firm value.

Original language	English
Article number	101804
Journal	Journal of International Financial Markets, Institutions and Money
Volume	87
DOIs	https://doi.org/10.1016/j.intfin.2023.101804
State	Published - Sep 2023

Keywords

Agency theory
Corporate governance
Firm value
The Politician as a CEO

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10.1016/j.intfin.2023.101804

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abstract = "Using a data set of two important emerging markets namely Taiwan and Pakistan, we investigate an unexplored dynamic of the top leadership i.e. the politician as a CEO and determine their impact on firm value. We show that the presence of the powerful politician as a CEO tends to limit the board power and endorse managerial entrenchment i.e. put their self-interests ahead of the firm's goals, which in turn, damage the firms{\textquoteright} value. We find a significant negative moderating effect of the political CEOs on the relationship of concentrated ownership, board independence and firm value.",

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AB - Using a data set of two important emerging markets namely Taiwan and Pakistan, we investigate an unexplored dynamic of the top leadership i.e. the politician as a CEO and determine their impact on firm value. We show that the presence of the powerful politician as a CEO tends to limit the board power and endorse managerial entrenchment i.e. put their self-interests ahead of the firm's goals, which in turn, damage the firms’ value. We find a significant negative moderating effect of the political CEOs on the relationship of concentrated ownership, board independence and firm value.

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KW - Corporate governance

KW - Firm value

KW - The Politician as a CEO

UR - https://www.scopus.com/pages/publications/85165959056

UR - https://www.scopus.com/pages/publications/85165959056#tab=citedBy

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JO - Journal of International Financial Markets, Institutions and Money

JF - Journal of International Financial Markets, Institutions and Money

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ER -

The politician as a CEO, corporate governance and firm value

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Keywords

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