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The Impact of CEO Characteristics on the Financial Performance of Family Businesses Listed in the Euronext Exchange

Author

Listed:
  • Zouhour El Abiad

    (Department of CRED, ESA Business School, Beirut 289, Lebanon)

  • Rebecca Abraham

    (Department of Finance and Economics, Nova Southeastern University, Fort Lauderdale, FL 33328, USA)

  • Hani El-Chaarani

    (Department of Management, Beirut Arab University, Beirut P.O. Box 11-5020, Lebanon)

  • Yahya Skaf

    (Department of Accounting and Finance, Notre Dame University-Louaize, Zouk Mosbeh 5425, Lebanon)

  • Ruaa Omar Binsaddig

    (Department of Finance, University of Business and Technology, Jeddah 23435, Saudi Arabia)

  • Syed Hasan Jafar

    (Department of Finance, Woxsen University, Telangana 502345, India)

Abstract

This paper identifies the CEO characteristics that have an impact on the performance of family businesses listed in the Euronext in the post-COVID 19 period. CEO characteristics are evaluated on two dimensions, i.e., personal characteristics and corporate governance mechanisms. A sample of 137 firm-year observations from Portugal, Luxembourg, the Netherlands, Ireland, France, and Belgium was chosen. CEO attributes of age, gender, education, and family membership were combined with corporate governance mechanisms of ownership concentration, CEO duality, CEO directorships, and CEO tenure, to predict return on assets and return on equity, using OLS regression. GMM estimation and Two-Stage Least Squares were employed to establish the robustness of the results. Among CEO personal characteristics, CEO family membership has a positive impact on return on assets, and a positive impact on return on equity. Among corporate governance mechanisms, CEO duality had a negative impact on return on assets, and a negative impact on return on equity. CEO ownership, and CEO tenure had a positive impact on return on assets, and a positive impact on return on equity. This paper’s value lies in its evaluation of the under-researched area of family businesses of Euronext-listed firms. It can be used by family businesses in the region, for the selection and training of CEOs to fulfill the goal of achieving superior financial performance.

Suggested Citation

  • Zouhour El Abiad & Rebecca Abraham & Hani El-Chaarani & Yahya Skaf & Ruaa Omar Binsaddig & Syed Hasan Jafar, 2024. "The Impact of CEO Characteristics on the Financial Performance of Family Businesses Listed in the Euronext Exchange," JRFM, MDPI, vol. 17(3), pages 1-21, March.
    • Handle: RePEc:gam:jjrfmx:v:17:y:2024:i:3:p:129-:d:1361273
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    References listed on IDEAS

    as
    1. Adams, Renée & Almeida, Heitor & Ferreira, Daniel, 2009. "Understanding the relationship between founder-CEOs and firm performance," Journal of Empirical Finance, Elsevier, vol. 16(1), pages 136-150, January.
    2. Marco Cucculelli & Valentina Peruzzi & Alberto Zazzaro, 2019. "Relational capital in lending relationships: evidence from European family firms," Small Business Economics, Springer, vol. 52(1), pages 277-301, January.
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    4. repec:bla:jfinan:v:58:y:2003:i:3:p:1301-1327 is not listed on IDEAS
    5. François Belot & Stéphanie Serve, 2018. "Earnings Quality in Private SMEs: Do CEO Demographics Matter?," Journal of Small Business Management, Taylor & Francis Journals, vol. 56(S1), pages 323-344, March.
    6. Ronald C. Anderson & David M. Reeb, 2003. "Founding‐Family Ownership and Firm Performance: Evidence from the S&P 500," Journal of Finance, American Finance Association, vol. 58(3), pages 1301-1328, June.
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    Cited by:

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