Publication

The Moderating Role of Board Structure and Market Competition on CEO Power, Risk, and Investment Efficiency

Yousaf, Saadia
Publication Date
End of Embargo
Supervisor
Akbar, Saeed
Eldaly, Mohamed K.A.
Keywords
Chief Executive Officer (CEO) power, Board structure, Market competition, Risk, Investment efficiency
Rights
Creative Commons License
The University of Bradford theses are licenced under a Creative Commons Licence.
Peer-Reviewed
Open Access status
Accepted for publication
Institution
University of Bradford
Department
School of Management. Faculty of Management, Law and Social Sciences
Awarded
2004
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PhD Thesis
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Abstract
This thesis comprises three empirical chapters. The first two empirical chapters investigate the moderating role of strong board structure and market competition on association between CEO power and risk by analysing the UK-listed financial and non-financial firms. The third empirical chapter provides evidence on the role of market competition in the nexus between powerful CEO and investment efficiency. Panel data estimation techniques (pooled regression and fixed effects) are used to analyse the sample over the period 2010-2018. This research finds that CEOs are risk averse, but they engage in more risk-taking in the presence of strong board structure and high market competition. However, the moderating influence of these governance forces on powerful CEOs’ approach towards risk-taking varies across financial and non-financial firms. Moreover, the study finds that firm investment efficiency is lower when CEO is powerful. However, market competition negatively moderates the relationship between CEO power and investment inefficiency. This study contributes to existing knowledge by analysing the UK sample which is contextually different than previous research undertaken in the US setting. Furthermore, this research provides comprehensive and comparative evidence in the area by analysing UK-listed financial and non-financial firms. The current research includes CEO social capital in multidimensional index as an additional aspect for measuring CEO power. This study provides further evidence on association between powerful CEO and investment efficiency by using a comprehensive measure that captures both under- and over-investment. Lastly, the results convey that market competition reduces the powerful CEO’s opportunistic approach to structure investment decisions inefficiently.
URI
https://bradscholars.brad.ac.uk/handle/10454/20523
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Type
Thesis
Qualification name
PhD
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