2008•Corporate Ownership and ControlOpen access

CEO duality and firm performance - an endogenous issue

Chia‐Wei Chen, Jang Shee Barry Lin, Bingsheng Yi

Abstract

Whether dual CEO leadership structure is better for corporations is one of the most hotly debated issues in corporate finance. This paper uses a recent data to re-examine the relationship between CEO duality and firm performance, controlling for other important variables such as firm characteristics, ownership structure, CEO compensation, and agency costs. We find a recent trend of increased number of firms converting from dual to non-dual CEO structure. However, our empirical results do not show a significant relationship between CEO duality and firm performance nor improvement in firm performance after change in leadership structure. We find evidence of endogeneity, and we attribute the insignificance of the relationship between CEO duality and firm performance to the possibility that CEO duality is endogenously and optimally determined given firm characteristic and ownership structure.

Open-access reader

About this research paper

What this paper is about

Why it matters

OpenAlex reports 140 citations for this work. Citation counts describe recorded attention and do not establish research quality.

Key contribution

A contribution statement is not available in the OpenAlex record.

Method / approach

Method details are not available in the OpenAlex metadata.

Main findings

Findings are not separately available in the OpenAlex metadata.

Limitations

Limitations are not available in the OpenAlex metadata.

Applications

Application details are not available in the OpenAlex metadata.

Available abstract

Key concepts: Endogeneity, Duality (order theory), Dual (grammatical number), Principal–agent problem, Business, Agency cost, Executive compensation, Firm offer