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Powerful Chief Executive Officers and Firm Performance: Integrating Agency and Stewardship Theory

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  • Penghua Qiao
  • Anna Fung
  • Jianchun Miao
  • Hung†Gay Fung

Abstract

Do agency and stewardship behaviors coexist at firms, or does one dominate the other? We use data from listed companies in China over the period 2007–2016 to show that powerful chief executive officers (CEOs) simultaneously incur self†interested agency costs while acting as stewards to benefit the firm. In balancing the push†and†pull forces of stewardship and agency behaviors, powerful CEOs in Chinese firms ultimately improve short†term and long†term firm performance. Our results have important implications for understanding how CEOs affect firms and how cultural factors can motivate CEOs to work in the interest of the firm.

Suggested Citation

  • Penghua Qiao & Anna Fung & Jianchun Miao & Hung†Gay Fung, 2017. "Powerful Chief Executive Officers and Firm Performance: Integrating Agency and Stewardship Theory," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 25(6), pages 100-119, November.
    • Handle: RePEc:bla:chinae:v:25:y:2017:i:6:p:100-119
    DOI: 10.1111/cwe.12223
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    2. Alam, Ahmed W. & Farjana, Ashupta & Houston, Reza, 2024. "Geopolitical risk, CEO power, and corporate lobbying: Do powerful CEOs lobby more?," Finance Research Letters, Elsevier, vol. 62(PA).
    3. Cristina Cersosimo, 2023. "The determinants of board size in Italian State-owned enterprises operating in water industry," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 50(2), pages 169-182, June.
    4. E L Mir & El Gnaoui, 2023. "Earnings management and market trust: what's the association? [L'earnings management et la confiance au marché : quelle association?]," Post-Print hal-04228281, HAL.
    5. Li, Xiaoqing & Qiao, Penghua & Zhao, Lin, 2019. "CEO media exposure, political connection and Chinese firms' stock price synchronicity," International Review of Economics & Finance, Elsevier, vol. 63(C), pages 61-75.
    6. Fung, Hung-Gay & Qiao, Penghua & Yau, Jot & Zeng, Yuping, 2020. "Leader narcissism and outward foreign direct investment: Evidence from Chinese firms," International Business Review, Elsevier, vol. 29(1).
    7. Zhi Su & Bo Yi & Linan Wang, 2022. "Is corporate philanthropy a pretext for executives' excess perk consumption? Evidence from China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 4010-4027, December.

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