The Interrelationship Of CEO Nationality With Financial Management, Firm Performance, And CEO Compensation

Abstract

In this exploratory research, and driven by intense interest in media focused

Physical Characteristics of the Chief Executive Officer and Firm Accounting and Market-Based Performance

“…The international experience (Daily et al 2000) or foreign nationality of the CEO is found to have a significant positive relation with profitability (Sanda et al 2008) and financial performance of the firms (Wah 2015). Also, a study finds that CEOs from Central and South America, Australia and New Zealand earn a higher return on assets than others (Jalbert et al 2007). …”

“…The impact of the cultural background of the CEO on firm performance can easily be seen in the differences in compensation of CEOs representing different cultures of the world (Adams et al 2007;Jalbert et al 2007). Upper echelon theory postulates that heterogeneity at the top augments the quality of strategic decisions.…”

“…It is argued that an individual representative of an ethnic minority becoming a CEO serves as evidence of the extraordinary talents and skills of the individual, which improves firm performance (Adams et al 2007;Jalbert et al 2007;Nguyen et al 2015). Amran et al (2014) find that ethnic Malay CEOs have a significant positive relation with the performance of the government-linked companies in Malaysia.…”

“…Accordingly, many empirical studies investigate certain characteristics of CEOs (Adams, Gupta, Haughton & Leeth 2007;Bhagat, Bolton & Subramanian 2010;Jalbert, Chan, Jalbert & Landry 2007;Zhang & Rajagopalan 2009). However, most studies are conducted in developed countries; and focus on a single characteristic of the CEO, such as origin (Zhang & Rajagopalan 2009); age (Ewart 2014;Serfling 2013); gender (Adams et al 2007;Ewart 2014;Serfling 2013); education (Bhagat et al 2010); experience (Cline & Yore 2016); salary (Ewart 2014); ethnicity (Mycroft 2012); and nationality (Jalbert et al 2007).…”

“…However, most studies are conducted in developed countries; and focus on a single characteristic of the CEO, such as origin (Zhang & Rajagopalan 2009); age (Ewart 2014;Serfling 2013); gender (Adams et al 2007;Ewart 2014;Serfling 2013); education (Bhagat et al 2010); experience (Cline & Yore 2016); salary (Ewart 2014); ethnicity (Mycroft 2012); and nationality (Jalbert et al 2007). With the exception of Butt et al (2012); Ewart (2014); and Cline & Yore (2016), such studies investigate the impact of CEO characteristics on firms' accounting performance as an outcome variable.…”