The effect of CEO attributes on firm performance: An upper echelons perspective
Abstract The effect of CEO attributes on firm performance of U.S. banks: An upper echelons theory perspective Purpose - The purpose of this paper is to extend on literature upper echelon’s theory beyond TMT’s to CEOs as key decision makers in a firm and integrate cognitive learning theory to un...
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| Format: | Dissertation (University of Nottingham only) |
| Language: | English |
| Published: |
2019
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| Online Access: | https://eprints.nottingham.ac.uk/58055/ |
| Summary: | Abstract
The effect of CEO attributes on firm performance of U.S. banks: An upper echelons theory perspective
Purpose - The purpose of this paper is to extend on literature upper echelon’s theory beyond TMT’s to CEOs as key decision makers in a firm and integrate cognitive learning theory to understand how CEOs former experiences (origin, prior CEO experience and education level) affect firm performance through their decision-making and strategic management processes.
Design/methodology – A feasible generalised least squares (FGLS) regression using data on 87 CEOs from 79 U.S. banks.
Findings - The results show that insider CEOs have a positive effect on market value performance indicator (EPS). CEO education level has a positive effect on profitability value performance indicators (ROAA and ROAE) and prior CEO experience has no significant effect on any firm performance indicator.
Limitations – The sample is restricted to only one industry (banks) and location (U.S.).
Practical Implications – The findings suggest that hiring CEOs from within (insider CEOs) improve firm performance and supports internal human capital development theory. Level of CEO education is key for firm innovation processes thus improving firm performance and prior CEO experience is not a wise pre-requisite for improving firm performance and CEO succession. |
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