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Insider CEOs and Corporate Misconduct: Evidence from China

Author

Listed:
  • Ying Zhang

    (Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia, Sintok 06010, Kedah, Malaysia)

  • Rusman bin Ghani

    (Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia, Sintok 06010, Kedah, Malaysia)

  • Danilah binti Salleh

    (Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia, Sintok 06010, Kedah, Malaysia)

Abstract

Inspired by the limited research regarding the influence of CEO succession origin on corporate misconduct, this study draws on organizational identification theory and agency theory to examine this issue. Empirical analysis indicates that insider CEOs significantly constrain corporate misconduct in China. Furthermore, the moderating results indicate that internal control strengthens the negative association between insider CEOs and corporate misconduct, whereas institutional ownership weakens this governance effect. Further analysis confirms that the restraining effect of insider CEOs on corporate misconduct remains robust across different types of misconduct. Overall, our study emphasizes the positive role of insider CEOs from the perspective of CEO succession origins and provides valuable practical implications for controlling corporate misconduct.

Suggested Citation

  • Ying Zhang & Rusman bin Ghani & Danilah binti Salleh, 2025. "Insider CEOs and Corporate Misconduct: Evidence from China," Risks, MDPI, vol. 13(9), pages 1-22, September.
    • Handle: RePEc:gam:jrisks:v:13:y:2025:i:9:p:179-:d:1749750
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