Does the CEO effect differ in times of crisis? Evidence from US and China during the global financial crisis

Ingo Kleindienst, Moustafa Haj Youssef, Mostafa Harakeh and Mei Yu

Journal of Business Research, 2024, vol. 182, issue C

Abstract: This study investigates short-term fluctuations in the CEO effect, measured as the proportion of variance in firm performance attributable to individual CEOs, in response to macroeconomic crises, with a specific focus on the global financial crisis. Utilizing multilevel modeling on a 15-year dataset of US firms and assessing three performance metrics, we identify a significant decline (increase) in the CEO effect on accounting-based (market-based) performance measures (measure) from the pre-crisis to the crisis period, followed by a significant rebound post-crisis. We replicate the analysis using a sample of Chinese firms and find a consistent pattern. Our research advances the CEO effect literature by emphasizing the dynamic nature of the CEO effect in an international context. Our findings highlight that the CEO effect is not static but can undergo short-term fluctuations due to significant changes in the macroeconomic environment.

Keywords: CEO effect; Firm performance; Financial crisis; Managerial discretion; Multilevel modeling (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0148296324003114
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:182:y:2024:i:c:s0148296324003114

DOI: 10.1016/j.jbusres.2024.114807

Access Statistics for this article

Journal of Business Research is currently edited by A. G. Woodside

More articles in Journal of Business Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().