Co-CEO and Investment Efficiency

Park, Jin-ha; Hyeon, Jiwon

doi:10.18032/kaaba.2018.31.3.557

Cited by 1 publication

(2 citation statements)

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“…As mentioned above, previous studies related to co-CEOs show that the co-CEO structure has the advantage of being able to create synergy effects in corporate management through mutual cooperation and enhancing the quality of management through mutual monitoring (Kandel and Lazear, 1992;Park and Hyun, 2018). On the other hand, there are disadvantages that the co-CEO structure might lead to inefficiency by focusing more on dispute resolution than cooperation because of intensifying competition (Hackman, 2002;Krause et al, 2015).…”

Section: Hypotheses Developmentmentioning

confidence: 98%

“…If the power gap between co-CEOs is large, then the benefit of shared leadership is weakened (Pearce and Conger, 2002; Sally, 2002), and if the co-CEO power is not horizontal, then the co-CEO structure may not work effectively (Haleblian and Finkelstein, 1993). When there are co-CEO power gaps, it is difficult for CEOs with strong authority to share leadership (Hackman, 2002; Krause et al , 2015; Park and Hyun, 2018). Krause et al (2015) demonstrate that if the power gap between co-CEOs is large, then the two CEOs do not have an additional positive effect on the firm’s value compared to a single-CEO structure.…”

Section: Review Of Related Literature and Hypotheses Developmentmentioning

confidence: 99%

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Female executives and firm value: the moderating effect of co-CEO power gaps

Hong¹,

Kim

2022

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Purpose This study aims to examine the moderating effect of co-CEO power gaps on the impact of female executives on firm value. Several studies have suggested that female executives have a positive effect on improving firm value. The authors would like to examine whether this relationship changes because of co-CEO power gaps. Design/methodology/approach For empirical analysis, 426 non-financial companies are selected from companies listed in the Korean securities market from 2013 to 2018. The relationships between dummy variables of female CEOs, outside directors, registered executives and Tobin’s Q are examined, and the moderating effect of co-CEO power gaps that scored various factors is verified. Findings The results of this study show that female executives have a positive impact on firm value, but the larger the co-CEOs power gap is, the weaker that impact is. Practical implications The mutual monitoring of co-CEOs substitutes for governance mechanisms, but if there are power gaps between co-CEOs, then the leadership cannot be equitably shared and the mutual monitoring effect can be weakened. Originality/value This study contributes to research on corporate executives by analyzing the relationship between female executives related to shared leadership and firm values in Korean companies. Especially, this study finds that the role of female executives is differentiated according to co-CEO power gaps by using the CEO power index that reflects the characteristics of Korean corporate governance.

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