The politician as a CEO, corporate governance and firm value

Qazi Amin and Douglas Cumming

Journal of International Financial Markets, Institutions and Money, 2023, vol. 87, issue C

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.

Keywords: The Politician as a CEO; Agency theory; Corporate governance; Firm value (search for similar items in EconPapers)
JEL-codes: C23 G30 G32 G34 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:87:y:2023:i:c:s1042443123000720

DOI: 10.1016/j.intfin.2023.101804

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