CEO power and labor-friendly policy

Humyra Jabeen Bristy, Jianlei Han and Gary Gang Tian

Pacific-Basin Finance Journal, 2022, vol. 71, issue C

Abstract: This paper explores the effect of the presence of powerful CEOs on the quality of their workplace and finds that firms with powerful CEOs invest less in labor-friendly programs and that this does not significantly affect firm value. However, the effect is attenuated for firms in some industries such as those that are highly competitive, those with a high level of innovation intensity, and those with high labor bargaining power. Policies emphasizing friendliness toward employees in highly competitive industries, in innovation-intensive industries, and in union-intensive industries are found to enhance firm value. Our study thus underscores the importance of industry heterogeneity in understanding the relationship between CEO power and labor-friendly policy.

Keywords: Powerful CEOs; Employee-friendly workplace; Competition; Innovation; Bargaining power of labor (search for similar items in EconPapers)
JEL-codes: G30 J23 J24 J53 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:71:y:2022:i:c:s0927538x21002067

DOI: 10.1016/j.pacfin.2021.101699

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