CEO Duality and Firm Performance: Does Economic Policy Uncertainty Mediate the Relation?

International Review of Finance, Forthcoming

18 Pages Posted: 1 May 2018

See all articles by Kiyoung Chang

Kiyoung Chang

University of South Florida Sarasota-Manatee - College of Business

Junyoup Lee

Ulsan National Institute of Science and Technology (UNIST)

Hyeongsop Shim

Gachon University

Date Written: April 13, 2018

Abstract

Exploiting two exogenous shocks, we examine the relation between CEO-Chairman duality and firm performance. We report evidence that CEO duality benefits a firm when economic policy uncertainty is high. This implies that CEO-Chairman duality is an advantageous governance mechanism for coping with economic policy uncertainty. We show that the Sarbanes-Oxley Act reduced firm performance if a firm had separate leadership in 2001. However, this negative effect was mitigated if a firm had combined leadership in 2001. The results suggest that CEO duality is complementary to board independence and that the value of CEO duality is contingent on a firm’s environment.

Keywords: CEO-Chairman Duality, Economic Policy Uncertainty, Sarbanes-Oxley Act, Board Independence, Firm Performance

JEL Classification: G34, D80, G18

Suggested Citation

Chang, Kiyoung and Lee, Junyoup and Shim, Hyeongsop, CEO Duality and Firm Performance: Does Economic Policy Uncertainty Mediate the Relation? (April 13, 2018). International Review of Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3161889

Kiyoung Chang

University of South Florida Sarasota-Manatee - College of Business ( email )

8350 N. Tamiami Trail, SMC-C263
Sarasota, FL 34243-2025
United States
9413594359 (Phone)
9413594367 (Fax)

Junyoup Lee

Ulsan National Institute of Science and Technology (UNIST) ( email )

UNIST-gil 50
Ulsan, 689-798
Korea, Republic of (South Korea)
82-52-217-3175 (Phone)
82-52-217-3109 (Fax)

Hyeongsop Shim (Contact Author)

Gachon University ( email )

1342 Seongnamdaero, Sujeong-gu
Gachon-gwan #707
Seongnam-si, 13120
Korea, Republic of (South Korea)
82-31-750-5530 (Phone)

HOME PAGE: http://orcid.org/0000-0001-8722-4610

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
48
Abstract Views
233
PlumX Metrics