Journal of
Accounting and Taxation

  • Abbreviation: J. Account. Taxation
  • Language: English
  • ISSN: 2141-6664
  • DOI: 10.5897/JAT
  • Start Year: 2009
  • Published Articles: 186

Full Length Research Paper

Effect of individual CEOs’ characteristics on firms’ performance: Evidence from China

Law Philip
  • Law Philip
  • Department of Accounting and Information Management, Room 3067, Faculty of Business Administration, E22, Avenida da Universidade, Taipa, University of Macau, Macau, China.
  • Google Scholar
Ningnan Wanggao
  • Ningnan Wanggao
  • Sinopec Marketing Company, Xiamen, China.
  • Google Scholar


  •  Received: 13 April 2022
  •  Accepted: 17 June 2022
  •  Published: 31 July 2022

Abstract

This paper investigates the effect of individual chief executive officers’ (CEOs’) characteristics on corporate performance. CEOs across 50 Chinese firms over time were selected and it was discovered that CEOs’ specific factors play a significant role in their firms’ performance. CEOs’ demographic characteristics include their legal background, dual position (that is, as both CEO and chairman of the same firm), shareholding ratio, gender, and tenure. The findings show that CEOs with a legal background have a positive influence on return on assets. Robustness tests support the validity of the main results. Our findings are consistent with the human capital theory and provide support for human-capital explanations in which CEOs’ legal expertise enhances their performance and corporate governance.

 

Key words: Corporate performance, return on assets (ROA), legal expertise, human capital theory.