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 | |
Publication status | Published - Feb 2022 |
Keywords
- Powerful CEOs
- Employee-friendly workplace
- Competition
- Innovation
- Bargaining power of labor