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Do CEO Traits Matter? A Machine Learning Analysis Across Emerging and Developed Markets

Author

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  • Chioma Ngozi Nwafor

    (Department of Law, Economics, Accountancy and Risk, Glasgow Caledonian University, Glasgow G4 0BA, UK)

  • Obumneme Z. Nwafor

    (Department of Law, Economics, Accountancy and Risk, Glasgow Caledonian University, Glasgow G4 0BA, UK)

  • Chinonyerem Matilda Omenihu

    (Department of Law, Economics, Accountancy and Risk, Glasgow Caledonian University, Glasgow G4 0BA, UK)

  • Madina Abdrakhmanova

    (Department of Law, Economics, Accountancy and Risk, Glasgow Caledonian University, Glasgow G4 0BA, UK)

Abstract

This study investigates the relationship between CEO characteristics and firm performance across emerging and developed economies using both panel regression and machine learning techniques. Drawing on Upper Echelons Theory, we examine whether CEO age, tenure, gender, founder status, and appointment origin influence Return on Assets (ROA), Return on Equity (ROE), and market-to-book ratio. We apply the fixed and random effects models for inference and deploy random forest and XGBoost models to determine the feature importance of each CEO trait. Our findings show that CEO tenure consistently predicts improved ROE and ROA, while CEO age and founder status negatively affect firm performance. Female CEOs, though not consistently significant in the baseline models, positively influence market valuation in emerging markets according to interaction models. Firm-level characteristics such as size and leverage dominate CEO traits in explaining performance outcomes, especially in machine learning rankings. By integrating machine learning feature importance, this study contributes an original approach to CEO evaluation, enabling firms and policymakers to prioritise leadership traits that matter most. The findings have practical implications for succession planning, diversity policy, and performance-based executive appointments.

Suggested Citation

  • Chioma Ngozi Nwafor & Obumneme Z. Nwafor & Chinonyerem Matilda Omenihu & Madina Abdrakhmanova, 2025. "Do CEO Traits Matter? A Machine Learning Analysis Across Emerging and Developed Markets," Administrative Sciences, MDPI, vol. 15(7), pages 1-23, July.
    • Handle: RePEc:gam:jadmsc:v:15:y:2025:i:7:p:268-:d:1698605
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    References listed on IDEAS

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    1. Jerry Hausman, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    2. James, Hui Liang & Jiraporn, Pornsit & Wang, Hongxia, 2025. "CEO tenure and labor investment efficiency," Journal of Contemporary Accounting and Economics, Elsevier, vol. 21(2).
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