Political Influence and Cost vs. Benefit of CEO Duality: Evidence from Post-IPO Performance in China

Heli Wang; Lijun Xia; Veicheng Yu

doi:doi:10.11648/j.ijebo.20170501.11

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Political Influence and Cost vs. Benefit of CEO Duality: Evidence from Post-IPO Performance in China

Heli Wang, Lijun Xia, Veicheng Yu

Published in International Journal of Economic Behavior and Organization (Volume 5, Issue 1)

Received: 9 February 2017 Published: 10 February 2017

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Abstract

Investigating the post-IPO performance of Chinese firms, we empirically examine the moderating effect of political influence in the cost vs. benefit analysis of CEO duality (the arrangement for the CEO to chair the board). We find that, on average, post-IPO performance is positively associated with CEO duality. Meanwhile, such a positive association is less pronounced for state-controlled firms, for the firms in regulated industries, and for the firms with politically connected CEOs. Our findings suggest that, the higher is the extent of political influence, the benefit of CEO duality is less likely to outweigh the cost of CEO duality. As for the implication for policy-makers, the evidence also suggests that the proposal asking all listed firms to separate the role of CEO from board chairman may need more careful consideration.

Published in	International Journal of Economic Behavior and Organization (Volume 5, Issue 1)
DOI	10.11648/j.ijebo.20170501.11
Page(s)	1-7
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

CEO Duality, Political Influence, Stewardship Theory, Agency Cost

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APA Style

Heli Wang, Lijun Xia, Veicheng Yu. (2017). Political Influence and Cost vs. Benefit of CEO Duality: Evidence from Post-IPO Performance in China. International Journal of Economic Behavior and Organization, 5(1), 1-7. https://doi.org/10.11648/j.ijebo.20170501.11

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ACS Style

Heli Wang; Lijun Xia; Veicheng Yu. Political Influence and Cost vs. Benefit of CEO Duality: Evidence from Post-IPO Performance in China. Int. J. Econ. Behav. Organ. 2017, 5(1), 1-7. doi: 10.11648/j.ijebo.20170501.11

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AMA Style

Heli Wang, Lijun Xia, Veicheng Yu. Political Influence and Cost vs. Benefit of CEO Duality: Evidence from Post-IPO Performance in China. Int J Econ Behav Organ. 2017;5(1):1-7. doi: 10.11648/j.ijebo.20170501.11

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@article{10.11648/j.ijebo.20170501.11,
  author = {Heli Wang and Lijun Xia and Veicheng Yu},
  title = {Political Influence and Cost vs. Benefit of CEO Duality: Evidence from Post-IPO Performance in China},
  journal = {International Journal of Economic Behavior and Organization},
  volume = {5},
  number = {1},
  pages = {1-7},
  doi = {10.11648/j.ijebo.20170501.11},
  url = {https://doi.org/10.11648/j.ijebo.20170501.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijebo.20170501.11},
  abstract = {Investigating the post-IPO performance of Chinese firms, we empirically examine the moderating effect of political influence in the cost vs. benefit analysis of CEO duality (the arrangement for the CEO to chair the board). We find that, on average, post-IPO performance is positively associated with CEO duality. Meanwhile, such a positive association is less pronounced for state-controlled firms, for the firms in regulated industries, and for the firms with politically connected CEOs. Our findings suggest that, the higher is the extent of political influence, the benefit of CEO duality is less likely to outweigh the cost of CEO duality. As for the implication for policy-makers, the evidence also suggests that the proposal asking all listed firms to separate the role of CEO from board chairman may need more careful consideration.},
 year = {2017}
}

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TY  - JOUR
T1  - Political Influence and Cost vs. Benefit of CEO Duality: Evidence from Post-IPO Performance in China
AU  - Heli Wang
AU  - Lijun Xia
AU  - Veicheng Yu
Y1  - 2017/02/10
PY  - 2017
N1  - https://doi.org/10.11648/j.ijebo.20170501.11
DO  - 10.11648/j.ijebo.20170501.11
T2  - International Journal of Economic Behavior and Organization
JF  - International Journal of Economic Behavior and Organization
JO  - International Journal of Economic Behavior and Organization
SP  - 1
EP  - 7
PB  - Science Publishing Group
SN  - 2328-7616
UR  - https://doi.org/10.11648/j.ijebo.20170501.11
AB  - Investigating the post-IPO performance of Chinese firms, we empirically examine the moderating effect of political influence in the cost vs. benefit analysis of CEO duality (the arrangement for the CEO to chair the board). We find that, on average, post-IPO performance is positively associated with CEO duality. Meanwhile, such a positive association is less pronounced for state-controlled firms, for the firms in regulated industries, and for the firms with politically connected CEOs. Our findings suggest that, the higher is the extent of political influence, the benefit of CEO duality is less likely to outweigh the cost of CEO duality. As for the implication for policy-makers, the evidence also suggests that the proposal asking all listed firms to separate the role of CEO from board chairman may need more careful consideration.
VL  - 5
IS  - 1
ER  -

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Author Information

Heli Wang

Lee Kong Chian School of Business, Singapore Management University, Fort Canning Park, Singapore
Lijun Xia

Antai School of Economics and Management, Shanghai Jiaotong University, Shanghai, China
Veicheng Yu

Faculty of Business, City University of Macau, Macau, China

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Plain Text BibTeX RIS

APA Style

Heli Wang, Lijun Xia, Veicheng Yu. (2017). Political Influence and Cost vs. Benefit of CEO Duality: Evidence from Post-IPO Performance in China. International Journal of Economic Behavior and Organization, 5(1), 1-7. https://doi.org/10.11648/j.ijebo.20170501.11

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ACS Style

Heli Wang; Lijun Xia; Veicheng Yu. Political Influence and Cost vs. Benefit of CEO Duality: Evidence from Post-IPO Performance in China. Int. J. Econ. Behav. Organ. 2017, 5(1), 1-7. doi: 10.11648/j.ijebo.20170501.11

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AMA Style

Heli Wang, Lijun Xia, Veicheng Yu. Political Influence and Cost vs. Benefit of CEO Duality: Evidence from Post-IPO Performance in China. Int J Econ Behav Organ. 2017;5(1):1-7. doi: 10.11648/j.ijebo.20170501.11

Copy | Download

@article{10.11648/j.ijebo.20170501.11,
  author = {Heli Wang and Lijun Xia and Veicheng Yu},
  title = {Political Influence and Cost vs. Benefit of CEO Duality: Evidence from Post-IPO Performance in China},
  journal = {International Journal of Economic Behavior and Organization},
  volume = {5},
  number = {1},
  pages = {1-7},
  doi = {10.11648/j.ijebo.20170501.11},
  url = {https://doi.org/10.11648/j.ijebo.20170501.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijebo.20170501.11},
  abstract = {Investigating the post-IPO performance of Chinese firms, we empirically examine the moderating effect of political influence in the cost vs. benefit analysis of CEO duality (the arrangement for the CEO to chair the board). We find that, on average, post-IPO performance is positively associated with CEO duality. Meanwhile, such a positive association is less pronounced for state-controlled firms, for the firms in regulated industries, and for the firms with politically connected CEOs. Our findings suggest that, the higher is the extent of political influence, the benefit of CEO duality is less likely to outweigh the cost of CEO duality. As for the implication for policy-makers, the evidence also suggests that the proposal asking all listed firms to separate the role of CEO from board chairman may need more careful consideration.},
 year = {2017}
}

Copy | Download

TY  - JOUR
T1  - Political Influence and Cost vs. Benefit of CEO Duality: Evidence from Post-IPO Performance in China
AU  - Heli Wang
AU  - Lijun Xia
AU  - Veicheng Yu
Y1  - 2017/02/10
PY  - 2017
N1  - https://doi.org/10.11648/j.ijebo.20170501.11
DO  - 10.11648/j.ijebo.20170501.11
T2  - International Journal of Economic Behavior and Organization
JF  - International Journal of Economic Behavior and Organization
JO  - International Journal of Economic Behavior and Organization
SP  - 1
EP  - 7
PB  - Science Publishing Group
SN  - 2328-7616
UR  - https://doi.org/10.11648/j.ijebo.20170501.11
AB  - Investigating the post-IPO performance of Chinese firms, we empirically examine the moderating effect of political influence in the cost vs. benefit analysis of CEO duality (the arrangement for the CEO to chair the board). We find that, on average, post-IPO performance is positively associated with CEO duality. Meanwhile, such a positive association is less pronounced for state-controlled firms, for the firms in regulated industries, and for the firms with politically connected CEOs. Our findings suggest that, the higher is the extent of political influence, the benefit of CEO duality is less likely to outweigh the cost of CEO duality. As for the implication for policy-makers, the evidence also suggests that the proposal asking all listed firms to separate the role of CEO from board chairman may need more careful consideration.
VL  - 5
IS  - 1
ER  -

Copy | Download