Abstract
This study investigates short-term fluctuations in the CEO effect, measured as the proportion of variance in firm performance attributable to individual CEOs, in response to macroeconomic crises, with a specific focus on the global financial crisis. Utilizing multilevel modeling on a 15-year dataset of US firms and assessing three performance metrics, we identify a significant decline (increase) in the CEO effect on accounting-based (market-based) performance measures (measure) from the pre-crisis to the crisis period, followed by a significant rebound post-crisis. We replicate the analysis using a sample of Chinese firms and find a consistent pattern. Our research advances the CEO effect literature by emphasizing the dynamic nature of the CEO effect in an international context. Our findings highlight that the CEO effect is not static but can undergo short-term fluctuations due to significant changes in the macroeconomic environment.
Original language | English |
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Article number | 114807 |
Number of pages | 13 |
Journal | Journal of Business Research |
Volume | 182 |
Early online date | 3 Jul 2024 |
DOIs | |
Publication status | Published - Sept 2024 |
Bibliographical note
Publisher Copyright:© 2024
Funder
This research was supported by the Aarhus University Research Foundation (grant no: AUFF-E-2015-FLS-8-60)Funding
We thank Timothy Quigley, Annamaria Georgieva, Jakob Arnoldi, and Eliane Choquette for their valuable comments on earlier drafts of this manuscript. This research was supported by the Aarhus University Research Foundation (grant no: AUFF-E-2015 - FLS -8-60)
Funders | Funder number |
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Aarhus Universitets Forskningsfond | AUFF-E-2015 - FLS -8-60 |
Keywords
- CEO effect
- Financial crisis
- Firm performance
- Managerial discretion
- Multilevel modeling
ASJC Scopus subject areas
- Marketing