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Does CEO Ownership in High-Tech Companies Affect Corporate Financial Decisions?

Author

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  • Elżbieta Bukalska
  • Jakub Czerniak
  • Irmina Florek

Abstract

The role of high-tech companies increases in turbulent times. Additionally, the status of the company (high-tech or non-high-tech) affects financial decisions. Moreover, CEOs with ownership in the company that they work for make specific financial decisions. The paper aims to identify the impact of CEO ownership on financial decisions in high-tech companies. The sample consists of 750 manufacturing firm-year observations from the period 2018-2021. All the companies included in the research are listed on the Warsaw Stock Exchange. Linear mixed-model analysis with individual and interactive effects were implemented. Findings show that high-tech companies managed by CEOs with a stake in a company differ from the rest: they are smaller, have higher cash ratios and have lower debt ratios. However, in high-tech companies, CEOs with a stake in the company affect investment expenditure, debt ratio and cash holdings positively. The originality of this research lies in including the interactive impact of CEO ownership and high-tech companies on financial decisions. The findings might be important for investors who want to invest in high-tech companies with a CEO as an owner. Implications for Central European audience: The findings might be important for other Central Eastern European countries and listed companies. The findings are important for investors who consider investing in companies managed by a CEO having a stake in the company as CEO ownership might lead to empire-building behaviour or rent extraction. The findings are important for policymakers as the cautious financing policy of high-tech companies (mostly based on equity) might affect the efficiency of public aid. Evidence shows that is important for the theoretical discussion on financial decisions and CEO ownership in a specific type of companies (high-tech companies).

Suggested Citation

  • Elżbieta Bukalska & Jakub Czerniak & Irmina Florek, 2025. "Does CEO Ownership in High-Tech Companies Affect Corporate Financial Decisions?," Central European Business Review, Prague University of Economics and Business, vol. 2025(4), pages 81-106.
    • Handle: RePEc:prg:jnlcbr:v:2025:y:2025:i:4:id:395:p:81-106
    DOI: 10.18267/j.cebr.395
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    Keywords

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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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