IDEAS home Printed from https://ideas.repec.org/a/bla/srbeha/v31y2014i1p94-101.html
   My bibliography  Save this article

The Impact of CEO Duality and Ownership on the Relationship Between Organisational Slack and Firm Performance in China

Author

Listed:
  • Dong Wang
  • Daojun Sun
  • Xiaofeng Yu
  • Yihao Zhang

Abstract

The study investigates the moderating effect of CEO (Chief Executive Officer) duality and CEO ownership on the relationship between organisational slack and firm performance. Through reviewing relevant literature on organisational slack, agency and stewardship theories, this study develops hypotheses on the relationship between organisational slack and firm performance and the moderations of CEO duality and CEO ownership. On the basis of a large data of Chinese firms, this study finds that there is a positive relationship between organisational slack and firm performance, and the moderating effect of CEO duality is positive, whereas that of CEO ownership is insignificant. The findings not only improve the understanding on the performance implication of organisational slack but also indicates that stewardship theory is more powerful than agency theory in China. Copyright © 2013 John Wiley & Sons, Ltd.

Suggested Citation

  • Dong Wang & Daojun Sun & Xiaofeng Yu & Yihao Zhang, 2014. "The Impact of CEO Duality and Ownership on the Relationship Between Organisational Slack and Firm Performance in China," Systems Research and Behavioral Science, Wiley Blackwell, vol. 31(1), pages 94-101, January.
    • Handle: RePEc:bla:srbeha:v:31:y:2014:i:1:p:94-101
    DOI: 10.1002/sres.2172
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/sres.2172
    Download Restriction: no
    File URL: https://libkey.io/10.1002/sres.2172?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
    2. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    3. Justin Tan & Mike W. Peng, 2003. "Organizational slack and firm performance during economic transitions: two studies from an emerging economy," Strategic Management Journal, Wiley Blackwell, vol. 24(13), pages 1249-1263, December.
    4. Mike W. Peng & Shujun Zhang & Xinchun Li, 2007. "CEO Duality and Firm Performance during China's Institutional Transitions," Management and Organization Review, The International Association for Chinese Management Research, vol. 3(2), pages 205-225, July.
    5. Morck, Randall & Shleifer, Andrei & Vishny, Robert W, 1989. "Alternative Mechanisms for Corporate Control," American Economic Review, American Economic Association, vol. 79(4), pages 842-852, September.
    6. Malatesta, Paul H. & Walkling, Ralph A., 1988. "Poison pill securities : Stockholder wealth, profitability, and ownership structure," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 347-376, January.
    7. Zhongfeng Su (苏中锋) & Jisheng Peng (彭纪生) & Hao Shen (沈灏) & Ting Xiao (肖婷), 2013. "Technological Capability, Marketing Capability, and Firm Performance in Turbulent Conditions. 技术能力、市场能力与企业绩效：基于环境不确定性的研究," Management and Organization Review, The International Association for Chinese Management Research, vol. 9(1), pages 115-137, March.
    8. Brian K. Boyd, 1995. "CEO duality and firm performance: A contingency model," Strategic Management Journal, Wiley Blackwell, vol. 16(4), pages 301-312.
    9. Matthew S. Kraatz & Edward J. Zajac, 2001. "How Organizational Resources Affect Strategic Change and Performance in Turbulent Environments: Theory and Evidence," Organization Science, INFORMS, vol. 12(5), pages 632-657, October.
    10. Su, Zhongfeng & Peng, Jisheng & Shen, Hao & Xiao, Ting, 2013. "Technological Capability, Marketing Capability, and Firm Performance in Turbulent Conditions," Management and Organization Review, Cambridge University Press, pages 115-138.
    11. Xu, Xiaonian & Wang, Yan, 1999. "Ownership structure and corporate governance in Chinese stock companies," China Economic Review, Elsevier, vol. 10(1), pages 75-98.
    12. Peng, Mike W. & Zhang, Shujun & Li, Xinchun, 2007. "CEO Duality and Firm Performance during China's Institutional Transitions," Management and Organization Review, Cambridge University Press, vol. 3(2), pages 205-225, July.
    13. Su, Zhongfeng & Peng, Jisheng & Shen, Hao & Xiao, Ting, 2013. "Technological Capability, Marketing Capability, and Firm Performance in Turbulent Conditions," Management and Organization Review, Cambridge University Press, vol. 9(1), pages 115-137, March.
    14. Henry L. Tosi & Amy L. Brownlee & Paula Silva & Jeffrey P. Katz, 2003. "An Empirical Exploration of Decision‐making Under Agency Controls and Stewardship Structure," Journal of Management Studies, Wiley Blackwell, vol. 40(8), pages 2053-2071, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ashfaque Banbhan & Xinsheng Cheng & Nizam Ud Din, 2018. "Financially Qualified Members in an Upper Echelon and Their Relationship with Corporate Sustainability: Evidence from an Emerging Economy," Sustainability, MDPI, vol. 10(12), pages 1-19, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Riaqa Mubeen & Dongping Han & Jaffar Abbas & Iftikhar Hussain, 2020. "The Effects of Market Competition, Capital Structure, and CEO Duality on Firm Performance: A Mediation Analysis by Incorporating the GMM Model Technique," Sustainability, MDPI, vol. 12(8), pages 1-18, April.
    2. Hsu, Shufang & Lin, Shih-Wei & Chen, Wei-Peng & Huang, Jhao-Wei, 2021. "CEO duality, information costs, and firm performance," The North American Journal of Economics and Finance, Elsevier, vol. 55(C).
    3. Marco Caiffa & Vincenzo Farina & Lucrezia Fattobene, 2021. "CEO Duality: Newspapers and Stock Market Reactions," JRFM, MDPI, vol. 14(1), pages 1-18, January.
    4. Shahid Ali & Muhammad Akram Naseem & Junfeng Jiang & Ramiz Ur Rehman & Fizzah Malik & Muhammad Ishfaq Ahmad, 2022. "“How†and “When†CEO Duality Matter? Case of a Developing Economy," SAGE Open, , vol. 12(3), pages 21582440221, August.
    5. Maurizio La Rocca & Francesco Fasano & Tiziana La Rocca & Neha Neha, 2024. "Women in CEO duality and firm performance in Europe," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(1), pages 177-214, March.
    6. Anup Banerjee & Mattias Nordqvist & Karin Hellerstedt, 2020. "The role of the board chair—A literature review and suggestions for future research," Corporate Governance: An International Review, Wiley Blackwell, vol. 28(6), pages 372-405, November.
    7. Neeraj Gupta & Jitendra Mahakud, 2020. "CEO characteristics and bank performance: evidence from India," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 35(8), pages 1057-1093, August.
    8. Franco Ernesto Rubino & Paolo Tenuta & Domenico Rocco Cambrea, 2017. "Board characteristics effects on performance in family and non-family business: a multi-theoretical approach," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 21(3), pages 623-658, September.
    9. Yu, Mei & Ashton, John K., 2015. "Board leadership structure for Chinese public listed companies," China Economic Review, Elsevier, vol. 34(C), pages 236-248.
    10. Paul McGuinness & Kevin Lam & João Vieito, 2015. "Gender and other major board characteristics in China: Explaining corporate dividend policy and governance," Asia Pacific Journal of Management, Springer, vol. 32(4), pages 989-1038, December.
    11. Jin-hui Luo & Di-fang Wan & Di Cai, 2012. "The private benefits of control in Chinese listed firms: Do cash flow rights always reduce controlling shareholders’ tunneling?," Asia Pacific Journal of Management, Springer, vol. 29(2), pages 499-518, June.
    12. Lili Pi & Julian Lowe, 2011. "Can a powerful CEO avoid involuntary replacement?—An empirical study from China," Asia Pacific Journal of Management, Springer, vol. 28(4), pages 775-805, December.
    13. Syeda Humayra Abedin & Humaira Haque & Tanjina Shahjahan & Md Nurul Kabir, 2022. "Institutional Ownership and Firm Performance: Evidence from an Emerging Economy," JRFM, MDPI, vol. 15(12), pages 1-17, November.
    14. Maria L. Goranova & Richard L. Priem & Hermann A. Ndofor & Cheryl A. Trahms, 2017. "Is there a “Dark Side” to Monitoring? Board and Shareholder Monitoring Effects on M&A Performance Extremeness," Strategic Management Journal, Wiley Blackwell, vol. 38(11), pages 2285-2297, November.
    15. Dian Perwitasari & Doddy Setiawan & An Nurrahmawati & Isna Putri Rahmawati, 2022. "Firm Performance during COVID-19 Pandemic: Does Ownership Identity Matter? Evidence from Indonesia," JRFM, MDPI, vol. 15(10), pages 1-18, September.
    16. Liu, Chunyan & Uchida, Konari & Yang, Yufeng, 2012. "Corporate governance and firm value during the global financial crisis: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 21(C), pages 70-80.
    17. Zhu, JianJun (John) & Tse, Caleb H. & Li, Xu, 2019. "Unfolding China’s state-owned corporate empires and mitigating agency hazards: Effects of foreign investments and innovativeness," Journal of World Business, Elsevier, vol. 54(3), pages 191-212.
    18. Zhongfeng Su & En Xie & Yuan Li, 2009. "Organizational slack and firm performance during institutional transitions," Asia Pacific Journal of Management, Springer, vol. 26(1), pages 75-91, March.
    19. Theodore Syriopoulos & Michael Tsatsaronis, 2012. "Corporate Governance Mechanisms and Financial Performance: CEO Duality in Shipping Firms," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 2(1), pages 1-30, June.
    20. Shleifer, Andrei & Vishny, Robert W, 1997. "A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:srbeha:v:31:y:2014:i:1:p:94-101. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1111/1092-7026 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.