CEO duality and firm performance: Evidence from a developing country

This study examines if the CEO duality influences firm performance in Bangladesh. It also examines the interaction of industries in influencing the relationship between CEO duality and firm performance. From an observation of 825 firm years the study uses a 2-stage least square regression (2SLS) analysis. The finding is that there is a negative (non-significant) relationship between CEO duality and firm performance. However, when the industry interaction terms (the role of industries as moderating variable) are added, the CEO duality and firm performance is found to vary across industries. The findings of this study suggest that the CEO duality and firm performance is contingent; no single leadership structure is universal; both the leadership structure has cost and benefits. It is beneficial in some situation supporting the stewardship theory while it is not in other situations supporting the agency theory. This study contributes to the literature on CEO duality and firm performance in the context of developing countries.