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Type: Journal article
Title: Does market power discipline CEO power? An agency perspective
Author: Jaroenjitrkam, A.
Yu, C.-.F.J.
Zurbruegg, R.
Citation: European Financial Management, 2019; 26(3):742-752
Publisher: Wiley
Issue Date: 2019
ISSN: 1354-7798
Statement of
Anutchanat Jaroenjitrkam, Chia, Feng (Jeffrey) Yu, Ralf Zurbruegg
Abstract: We examine how product market competition (PMC) shapes chief executive officer’s (CEO) power. Using various measures to capture both PMC and CEO power, our analyses, which include a quasi‐natural experiment, find evidence that CEOs have less power when the product market is more competitive. Furthermore, the impact of PMC on CEO power is more pronounced for firms with entrenched management, lower CEO ownership, lower analyst coverage, and for firms experiencing good ‘luck’ (windfall performance). Our results suggest that market power can act as a substitute for corporate governance in disciplining CEO power, particularly when prone to agency problems.
Keywords: CEO power; corporate governance; luck; market competition
Rights: © 2019 John Wiley & Sons Ltd.
RMID: 1000002579
DOI: 10.1111/eufm.12240
Appears in Collections:Business School publications

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