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Steward Effects of Target Founder-CEO in Takeovers

Author

Listed:
  • Qizhi Tao
  • Fei Shen
  • Yingying Shao
  • Guowei Li

Abstract

Built upon the agency theory and the stewardship theory, this study examines the mergers and acquisitions (M&A) activities among Chinese publicly listed firms. Using a founder-CEO indicator, we separate steward effects from agency effects, and find that Chinese firms’ M&A activities are significantly influenced by the steward factors after controlling for the agency factors. Firms, of which CEO is a founder, enjoy relatively higher premium during M&A. Further investigation reveals that the steward effects vary in the power of CEO. The results show that steward effect is reinforced when founder-CEO is more powerful.

Suggested Citation

  • Qizhi Tao & Fei Shen & Yingying Shao & Guowei Li, 2018. "Steward Effects of Target Founder-CEO in Takeovers," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 54(9), pages 2117-2135, July.
    • Handle: RePEc:mes:emfitr:v:54:y:2018:i:9:p:2117-2135
    DOI: 10.1080/1540496X.2017.1418657
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    Cited by:

    1. Qian Wang & Xiaojie Pei & Huigang Liang, 2022. "Founder CEO, CEO Characteristics, and Firm Innovation Efficiency: An Empirical Study of China’s GEM-Listed Companies," Sustainability, MDPI, vol. 14(14), pages 1-22, July.
    2. Dzung Viet Nguyen & Ngan Hoang-Kim Nguyen & Tien Thuy Dinh, 2023. "CEO attributes and firm performance: Evidence from companies listed on Ho Chi Minh Stock Exchange," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(2), pages 2282838-228, October.
    3. Keskiner, Hilal & Gür, Bekir S., 2023. "Questioning merit-based scholarships at nonprofit private universities: Lessons from Turkey," International Journal of Educational Development, Elsevier, vol. 97(C).

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