Powerful CEOS and Their Impact on Corporate Performance

Adams, Renée, Almeida, Heitor and Ferreira, Daniel (2005) Powerful CEOS and Their Impact on Corporate Performance. Review of Financial Studies, 18 (4). pp. 1403-1432.


Executives can only impact firm outcomes if they have influence over crucial decisions. Based on this idea we develop and test the hypothesis that firms whose CEOs have more decision-making power should experience more variability in performance. We construct proxies for the CEO's power to influence decisions and show that stock returns are significantly more variable for firms run by powerful CEOs. We find similar results using alternative measures of performance. These findings suggest that the interaction between executive characteristics and organizational variables may have important consequences for firm performance.

Item Type: Article
Keywords: finance
Subject(s): Finance
Date Deposited: 03 Oct 2018 09:15
Last Modified: 03 Oct 2018 09:15
Funders: N/A
URI: http://eureka.sbs.ox.ac.uk/id/eprint/6981

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