CEO power and firm opacity

Kwangjoo Koo, Jonghwan (Simon) Kim

Research output: Contribution to journalArticle

Abstract

This paper examines the association between CEO power and firm opacity. We discuss the entrenchment and managerial power theories to develop a coherent hypothesis that captures a negative relationship. To investigate the relationship, we use CEO pay slice (CPS) and opacity index as proxies for CEO power and information environment, respectively. With alternate model specifications, we consistently find that firm opacity is positively associated with CPS. With the findings, we conclude that powerful CEOs pursue greater firm opacity–leading to poorer information environments–to hide, if any, agency issues or poor firm performance.

Original languageEnglish (US)
Pages (from-to)791-794
Number of pages4
JournalApplied Economics Letters
Volume26
Issue number10
DOIs
StatePublished - Jun 7 2019

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CEO power
Opacity
CEO pay
Firm performance
Information environment
Chief executive officer
Model specification
Managerial power
Entrenchment

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Cite this

Koo, Kwangjoo ; Kim, Jonghwan (Simon). / CEO power and firm opacity. In: Applied Economics Letters. 2019 ; Vol. 26, No. 10. pp. 791-794.
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CEO power and firm opacity. / Koo, Kwangjoo; Kim, Jonghwan (Simon).

In: Applied Economics Letters, Vol. 26, No. 10, 07.06.2019, p. 791-794.

Research output: Contribution to journalArticle

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