CEO power and labor-friendly policy

Humyra Jabeen Bristy; Jianlei Han; Gary Gang Tian

doi:10.1016/j.pacfin.2021.101699

CEO power and labor-friendly policy

Humyra Jabeen Bristy, Jianlei Han, Gary Gang Tian

Department of Applied Finance

Research output: Contribution to journal › Article › peer-review

12 Citations (Scopus)

Abstract

This paper explores the effect of the presence of powerful CEOs on the quality of their workplace and finds that firms with powerful CEOs invest less in labor-friendly programs and that this does not significantly affect firm value. However, the effect is attenuated for firms in some industries such as those that are highly competitive, those with a high level of innovation intensity, and those with high labor bargaining power. Policies emphasizing friendliness toward employees in highly competitive industries, in innovation-intensive industries, and in union-intensive industries are found to enhance firm value. Our study thus underscores the importance of industry heterogeneity in understanding the relationship between CEO power and labor-friendly policy.

Original language	English
Article number	101699
Pages (from-to)	1-17
Number of pages	17
Journal	Pacific-Basin Finance Journal
Volume	71
DOIs	https://doi.org/10.1016/j.pacfin.2021.101699
Publication status	Published - Feb 2022

Keywords

Powerful CEOs
Employee-friendly workplace
Competition
Innovation
Bargaining power of labor

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10.1016/j.pacfin.2021.101699

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title = "CEO power and labor-friendly policy",

abstract = "This paper explores the effect of the presence of powerful CEOs on the quality of their workplace and finds that firms with powerful CEOs invest less in labor-friendly programs and that this does not significantly affect firm value. However, the effect is attenuated for firms in some industries such as those that are highly competitive, those with a high level of innovation intensity, and those with high labor bargaining power. Policies emphasizing friendliness toward employees in highly competitive industries, in innovation-intensive industries, and in union-intensive industries are found to enhance firm value. Our study thus underscores the importance of industry heterogeneity in understanding the relationship between CEO power and labor-friendly policy.",

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CEO power and labor-friendly policy

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Keywords

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