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Study On Correlation Between Ceo Duality And Corporate Performance Of Companies Listed On The Bucharest Stock Exchange

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  • Raluca Georgiana MOSCU

    () (The Bucharest University of Economic Studies, PhD Student)

Abstract

In Romania it is not recommended the duality of positions, the term "recommended" not being strictly kept, so there is a 33% case of companies listed on BSE that do not comply with codes of governance on the plurality of positions and the Chairman assumes the responsibility for the General Manager (CEO) of the company. In terms of CEO - Chairman of the Board of Directors duality, the professional theory comes with two different approaches, showing that in terms of agent theory duality negatively affects the corporate performance and the stewardship theory says the opposite. Using data of 55 listed Romanian firms from the Bucharest Stock Exchange in 2010-2013 we analyse the relationship between CEO duality and performance (Return on Assets) or between CEO duality and some variables which describe some characteristics of corporate governance (concentrated ownership structure, presence of general manager as a shareholder, presence of institutional investors, size of the Board, presence of a woman in the position of Chairman, age of Chairman or presence of one tier governance system). Empirical findings indicate that CEO duality is positively related with Return on Assets (ROA) which supports stewardship theory. The variable that shows the duality is positively correlated with concentrated ownership structure, the variable that shows the general manager is also a shareholder, size of the Board and the variable that shows position of Chairman is held by a woman, age of Chairman and negatively with the variable that show presence of one tier governance system.

Suggested Citation

  • Raluca Georgiana MOSCU, 2015. "Study On Correlation Between Ceo Duality And Corporate Performance Of Companies Listed On The Bucharest Stock Exchange," Journal of Social and Economic Statistics, Bucharest University of Economic Studies, vol. 4(1), pages 47-53, JULY.
  • Handle: RePEc:aes:jsesro:v:4:y:2015:i:1:p:47-53
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    References listed on IDEAS

    as
    1. Renée B. Adams & Heitor Almeida & Daniel Ferreira, 2005. "Powerful CEOs and Their Impact on Corporate Performance," Review of Financial Studies, Society for Financial Studies, vol. 18(4), pages 1403-1432.
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    5. Georgeta Vintila & Stefan Cristian Gherghina, 2013. "Board of Directors Independence and Firm Value: Empirical Evidence Based on the Bucharest Stock Exchange Listed Companies," International Journal of Economics and Financial Issues, Econjournals, vol. 3(4), pages 885-900.
    6. Gillan, Stuart L., 2006. "Recent Developments in Corporate Governance: An Overview," Journal of Corporate Finance, Elsevier, vol. 12(3), pages 381-402, June.
    7. Jay Dahya & John J. McConnell & Nickolaos G. Travlos, 2002. "The Cadbury Committee, Corporate Performance, and Top Management Turnover," Journal of Finance, American Finance Association, vol. 57(1), pages 461-483, February.
    8. repec:hrv:faseco:30728046 is not listed on IDEAS
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    More about this item

    Keywords

    Corporate governance; CEO duality; Board of Directors; Corporate performance;

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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