Does the CEO effect differ in times of crisis? Evidence from US and China during the global financial crisis

Ingo Kleindienst; Moustafa Haj Youssef; Mostafa Harakeh; Mei Yu

doi:10.1016/j.jbusres.2024.114807

Does the CEO effect differ in times of crisis? Evidence from US and China during the global financial crisis

Ingo Kleindienst
, Moustafa Haj Youssef
, Mostafa Harakeh
, Mei Yu

Aarhus University
American University of Beirut
Liverpool John Moores University

Research output: Contribution to journal › Article › peer-review

9 Citations (Scopus)

71 Downloads (Pure)

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
Article number	114807
Number of pages	13
Journal	Journal of Business Research
Volume	182
Early online date	3 Jul 2024
DOIs	https://doi.org/10.1016/j.jbusres.2024.114807
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
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

Access to Document

10.1016/j.jbusres.2024.114807Licence: CC BY

Yu2024VoRFinal published version, 1.09 MBLicence: CC BY

Cite this

@article{ebddde2bb6a0463c94a2667ef574694c,

title = "Does the CEO effect differ in times of crisis? Evidence from US and China during the global financial crisis",

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.",

keywords = "CEO effect, Financial crisis, Firm performance, Managerial discretion, Multilevel modeling",

author = "Ingo Kleindienst and \{Haj Youssef\}, Moustafa and Mostafa Harakeh and Mei Yu",

note = "Publisher Copyright: {\textcopyright} 2024",

year = "2024",

month = sep,

doi = "10.1016/j.jbusres.2024.114807",

language = "English",

volume = "182",

journal = "Journal of Business Research",

issn = "0148-2963",

publisher = "Elsevier",

}

TY - JOUR

T1 - Does the CEO effect differ in times of crisis? Evidence from US and China during the global financial crisis

AU - Kleindienst, Ingo

AU - Haj Youssef, Moustafa

AU - Harakeh, Mostafa

AU - Yu, Mei

PY - 2024/9

Y1 - 2024/9

N2 - 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.

AB - 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.

KW - CEO effect

KW - Financial crisis

KW - Firm performance

KW - Managerial discretion

KW - Multilevel modeling

UR - https://www.scopus.com/pages/publications/85197312100

U2 - 10.1016/j.jbusres.2024.114807

DO - 10.1016/j.jbusres.2024.114807

M3 - Article

AN - SCOPUS:85197312100

SN - 0148-2963

VL - 182

JO - Journal of Business Research

JF - Journal of Business Research

M1 - 114807

ER -

Does the CEO effect differ in times of crisis? Evidence from US and China during the global financial crisis

Abstract

Bibliographical note

Funder

Funding

Keywords

ASJC Scopus subject areas

Access to Document

Other files and links

Fingerprint

Cite this