The Moderating Role of Board Structure and Market Competition on CEO Power, Risk, and Investment Efficiency

This thesis comprises three empirical chapters. The first two empirical chapters investigate the moderating role of strong board structure and market competition on association between CEO power and risk by analysing the UK-listed financial and non-financial firms. The third empirical chapter provides evidence on the role of market competition in the nexus between powerful CEO and investment efficiency. Panel data estimation techniques (pooled regression and fixed effects) are used to analyse the sample over the period 2010-2018. This research finds that CEOs are risk averse, but they engage in more risk-taking in the presence of strong board structure and high market competition. However, the moderating influence of these governance forces on powerful CEOs’ approach towards risk-taking varies across financial and non-financial firms. Moreover, the study finds that firm investment efficiency is lower when CEO is powerful. However, market competition negatively moderates the relationship between CEO power and investment inefficiency. This study contributes to existing knowledge by analysing the UK sample which is contextually different than previous research undertaken in the US setting. Furthermore, this research provides comprehensive and comparative evidence in the area by analysing UK-listed financial and non-financial firms. The current research includes CEO social capital in multidimensional index as an additional aspect for measuring CEO power. This study provides further evidence on association between powerful CEO and investment efficiency by using a comprehensive measure that captures both under- and over-investment. Lastly, the results convey that market competition reduces the powerful CEO’s opportunistic approach to structure investment decisions inefficiently.

Grantor dc:publisher.institution

University of Bradford

Author dc:creator

• Yousaf, Saadia

Advisors dc:contributor.advisor

• Akbar, Saeed
• Eldaly, Mohamed K.A.

• Chief Executive Officer (CEO) power
• Board structure
• Market competition
• Risk
• Investment efficiency

Statement dc:rights

• <a rel="license" href="http://creativecommons.org/licenses/by-nc-nd/3.0/"><img alt="Creative Commons License" style="border-width:0" src="http://i.creativecommons.org/l/by-nc-nd/3.0/88x31.png" /></a><br />The University of Bradford theses are licenced under a <a rel="license" href="http://creativecommons.org/licenses/by-nc-nd/3.0/">Creative Commons Licence</a>.

Language dc:language.iso

en

Repository record dc:identifier.uri

https://bradscholars.brad.ac.uk/handle/10454/20523

OAI identifier oai:identifier

oai:bradscholars.brad.ac.uk:10454/20523