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Generalist CEO and Firm Performance: Evidence from Indonesia

In: Macroeconomic Risk and Growth in the Southeast Asian Countries: Insight from Indonesia

Author

Listed:
  • Diyah Kusuma Wardhani
  • Tastaftiyan Risfandy
  • Yunieta Anny Nainggolan
  • Bowo Setiyono

Abstract

The authors examine the impact of CEO generalist experience on firm performance. Using 522 listed firms in Indonesia for the period 2010–2018, the authors find that the generalist CEO is negatively associated with firm performance. Generalist CEOs tend to experience ambiguity in adjustments in the new environment. In order to decrease the impact of a generalist CEO, our empirical evidence finds that CEO tenure does not significantly moderate the association between the two. This is because generalist CEOs with longer tenure tend to avoid changing strategies, and therefore the negative impact of CEO generalist is not altered. The results of this study provide suggestions for the firm in the developing country to appoint a CEO with generalist experience.

Suggested Citation

  • Diyah Kusuma Wardhani & Tastaftiyan Risfandy & Yunieta Anny Nainggolan & Bowo Setiyono, 2023. "Generalist CEO and Firm Performance: Evidence from Indonesia," International Symposia in Economic Theory and Econometrics, in: Macroeconomic Risk and Growth in the Southeast Asian Countries: Insight from Indonesia, volume 33, pages 171-179, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:isetez:s1571-03862023000033a012
    DOI: 10.1108/S1571-03862023000033A012
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    More about this item

    Keywords

    Generalist CEO; firm performance; CEO tenure; career experience; company resources; developing country; Indonesia; G2; G3; G38;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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