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Knighthoods, damehoods, and CEO behaviour

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  • Raff, Konrad
  • Siming, Linus

Abstract

We study whether and how politicians can influence the behaviour of CEOs and firm performance with prestigious government awards. We present a simple model to develop the hypothesis that government awards have a negative effect on firm performance. The empirical analysis uses two legal reforms in New Zealand for identification: knighthoods and damehoods were abolished in April 2000 and reinstated in March 2009. The findings are consistent with the predictions of the model. The results suggest that government awards serve as an incentive tool through which politicians influence firms in favour of employees to the detriment of shareholders.

Suggested Citation

  • Raff, Konrad & Siming, Linus, 2019. "Knighthoods, damehoods, and CEO behaviour," Journal of Corporate Finance, Elsevier, vol. 59(C), pages 302-319.
    • Handle: RePEc:eee:corfin:v:59:y:2019:i:c:p:302-319
    DOI: 10.1016/j.jcorpfin.2016.10.004
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    Cited by:

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    2. Lu, Yun & Ntim, Collins G. & Zhang, Qingjing & Li, Pingli, 2022. "Board of directors’ attributes and corporate outcomes: A systematic literature review and future research agenda," International Review of Financial Analysis, Elsevier, vol. 84(C).
    3. Lucey, Brian & Urquhart, Andrew & Zhang, Hanxiong, 2022. "UK Vice Chancellor compensation: Do they get what they deserve?," The British Accounting Review, Elsevier, vol. 54(4).

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    More about this item

    Keywords

    Awards; CEO incentives; Employment; Stakeholder-oriented firms;
    All these keywords.

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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