Does CEO Duality is Really Matter? Evidence from an Emerging Market

Corporate Ownership & Control, Vol. 8, No. 4, Summer 2011

23 Pages Posted: 3 Aug 2011

See all articles by Nirosha Hewa Wellalage

Nirosha Hewa Wellalage

The University of Waikato

Stuart Locke

University of Waikato - Management School

Date Written: May 29, 2011

Abstract

The relationship between board leadership, firm financial performance and agency costs is examined on behalf of a sample of multinational company subsidiaries (MNCs) and local public companies (LPCs) in Sri Lanka. Five years of data for 86 MNC subsidiaries and 113 LPCs, are collected and observations are analyzed using a dynamic panel GMM estimation. This study provides empirical support for stewardship theory and contingency theory when firms are multinational subsidiaries. Moreover, findings support agency theory when firms are local public companies. Finally, this study indicates that there is no optimal board leadership structure. Hence, when companies commence their exploration of corporate governance practices, firms need to recognized that firm characteristics and contingency perspective boost the impact of board leadership structure on corporate financial performance.

Keywords: CEO duality, financial performance, agency costs, emergin market

JEL Classification: G32

Suggested Citation

Hewa Wellalage, Nirosha and Locke, Stuart, Does CEO Duality is Really Matter? Evidence from an Emerging Market (May 29, 2011). Corporate Ownership & Control, Vol. 8, No. 4, Summer 2011 , Available at SSRN: https://ssrn.com/abstract=1904125

Nirosha Hewa Wellalage (Contact Author)

The University of Waikato ( email )

Stuart Locke

University of Waikato - Management School ( email )

Hamilton
New Zealand

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