Cross-sectional determinants of CEO tenure and firm performance
| Variable(s) | DEP = TOBINSQ | |||||
|---|---|---|---|---|---|---|
| High competition | Low competition | |||||
| Model 1 | Model 2 | Model 3 | Model 1 | Model 2 | Model 3 | |
| Coefficient (t-value) | Coefficient (t-value) | Coefficient (t-value) | Coefficient (t-value) | Coefficient (t-value) | Coefficient (t-value) | |
| Panel A – product market competition | ||||||
| CEO_TENURE | 0.0344** (2.32) | 0.1265** (3.63) | −0.0068 (−0.89) | −0.0245 (−1.33) | ||
| CEO_TENURE2 | −0.0047*** (−3.23) | 0.0010 (0.93) | ||||
| Ln(CEO_TENURE) | 0.1598*** (2.67) | −0.0155 (−0.49) | ||||
| Controls | CEO_AGE, CEO_GENDER, CEO_FOUNDER, CEO_DUAL, SIZE, LEV and LOSS | |||||
| Constant | 4.6543** (2.31) | 5.7123** (2.19) | 4.9876** (2.29) | −0.2545 (−0.77) | −0.1976 (−0.09) | −0.0045 (−0.04) |
| YEAR_FE | Yes | Yes | Yes | Yes | Yes | Yes |
| INDUSTRY_FE | Yes | Yes | Yes | Yes | Yes | Yes |
| Adj R2 | 0.2578 | 0.2602 | 0.2770 | 0.4986 | 0.4501 | 0.4576 |
| N | 579 | 579 | 579 | 611 | 611 | 611 |
| Panel B – audit quality | ||||||
| Variable(s) | DEP = TOBINSQ | |||||
| Big4 = 1 | Big4 = 0 | |||||
| CEO_TENURE | 0.0188* (1.92) | 0.0591*** (2.79) | 0.0171 (1.29) | 0.0512 (1.26) | ||
| CEO_TENURE2 | −0.0022** (−2.44) | −0.0016 (−1.16) | ||||
| Ln(CEO_TENURE) | 0.1003*** (2.67) | 0.0599 (0.96) | ||||
| Controls | CEO_AGE, CEO_GENDER, CEO_FOUNDER, CEO_DUAL, SIZE, LEV and LOSS | |||||
| Constant | 5.1012** (2.54) | 4.9091** (2.34 | 5.1004** (2.48) | 5.1123 (1.19) | 5.1125 (1.19) | 5.2111 (1.14) |
| YEAR_FE | Yes | Yes | Yes | Yes | Yes | Yes |
| INDUSTRY_FE | Yes | Yes | Yes | Yes | Yes | Yes |
| Adj R2 | 0.1759 | 0.1801 | 0.1671 | 0.3210 | 0.3201 | 0.3109 |
| N | 1106 | 1106 | 1106 | 362 | 362 | 362 |
| Panel C – firm age | ||||||
| Variable(s) | DEP= TOBINSQ | |||||
| New firm | Old firm | |||||
| CEO_TENURE | 0.0399*** (3.27) | 0.1264*** (4.19) | −0.0076 (−0.69) | 0.0401 (1.32) | ||
| CEO_TENURE2 | −0.0047*** (−3.27) | −0.0026* (−1.71) | ||||
| Ln(CEO_TENURE) | 0.2081*** (3.98) | −0.0011 (−0.01) | ||||
| Controls | CEO_AGE, CEO_GENDER, CEO_FOUNDER, CEO_DUAL, SIZE, LEV and LOSS | |||||
| Constant | 9.4910*** (3.35) | 9.0588*** (3.21) | 9.02410*** (3.36) | 1.3999 (0.59) | 1.0762 (0.32) | 1.8422 (0.69) |
| YEAR_FE | Yes | Yes | Yes | Yes | Yes | Yes |
| INDUSTRY_FE | Yes | 911 | Yes | Yes | Yes | Yes |
| Adj R2 | 0.1811 | 0.1896 | 0.1888 | 0.1792 | 0.1812 | 0.1810 |
| N | 782 | 782 | 765 | 700 | 700 | 700 |
| Panel D – life cycle | ||||||
| Variable(s) | DEP = TOBINSQ | |||||
| MATURE = 0 | MATURE = 1 | |||||
| CEO_TENURE | 0.0239** (2.17) | 0.1119*** (4.42) | 0.0390 (1.42) | −0.0329 (−0.62) | ||
| CEO_TENURE2 | −0.0036*** (−3.62) | −0.0048 (−1.24) | ||||
| Ln(CEO_TENURE) | 0.1411*** (2.70) | 0.0988 (0.89) | ||||
| Controls | CEO_AGE, CEO_GENDER, CEO_FOUNDER, CEO_DUAL, SIZE, LEV and LOSS | |||||
| Constant | 5.1911* (1.76) | 5.1121* (1.70) | 5.5871* (1.72) | 11.2415*** (2.92) | 12.2450** (2.32) | 10.1670** (2.11) |
| YEAR_FE | Yes | Yes | Yes | Yes | Yes | Yes |
| INDUSTRY_FE | Yes | Yes | Yes | Yes | Yes | Yes |
| Adj R2 | 0.2095 | 0.2214 | 0.2064 | 0.5095 | 0.5254 | 0.5301 |
| N | 765 | 765 | 765 | 108 | 108 | 108 |
| Variable(s) | DEP = TOBINSQ | |||||
|---|---|---|---|---|---|---|
| High competition | Low competition | |||||
| Model 1 | Model 2 | Model 3 | Model 1 | Model 2 | Model 3 | |
| Coefficient ( | Coefficient ( | Coefficient ( | Coefficient ( | Coefficient ( | Coefficient ( | |
| CEO_TENURE | 0.0344 | 0.1265 | −0.0068 (−0.89) | −0.0245 (−1.33) | ||
| CEO_TENURE2 | −0.0047 | 0.0010 (0.93) | ||||
| Ln(CEO_TENURE) | 0.1598 | −0.0155 (−0.49) | ||||
| Controls | CEO_AGE, CEO_GENDER, CEO_FOUNDER, CEO_DUAL, SIZE, LEV and LOSS | |||||
| Constant | 4.6543 | 5.7123 | 4.9876 | −0.2545 (−0.77) | −0.1976 (−0.09) | −0.0045 (−0.04) |
| YEAR_FE | Yes | Yes | Yes | Yes | Yes | Yes |
| INDUSTRY_FE | Yes | Yes | Yes | Yes | Yes | Yes |
| Adj | 0.2578 | 0.2602 | 0.2770 | 0.4986 | 0.4501 | 0.4576 |
| 579 | 579 | 579 | 611 | 611 | 611 | |
| Variable(s) | DEP = TOBINSQ | |||||
| Big4 = 1 | Big4 = 0 | |||||
| CEO_TENURE | 0.0188 | 0.0591 | 0.0171 (1.29) | 0.0512 (1.26) | ||
| CEO_TENURE2 | −0.0022 | −0.0016 (−1.16) | ||||
| Ln(CEO_TENURE) | 0.1003 | 0.0599 (0.96) | ||||
| Controls | CEO_AGE, CEO_GENDER, CEO_FOUNDER, CEO_DUAL, SIZE, LEV and LOSS | |||||
| Constant | 5.1012 | 4.9091 | 5.1004 | 5.1123 (1.19) | 5.1125 (1.19) | 5.2111 (1.14) |
| YEAR_FE | Yes | Yes | Yes | Yes | Yes | Yes |
| INDUSTRY_FE | Yes | Yes | Yes | Yes | Yes | Yes |
| Adj R2 | 0.1759 | 0.1801 | 0.1671 | 0.3210 | 0.3201 | 0.3109 |
| N | 1106 | 1106 | 1106 | 362 | 362 | 362 |
| Variable(s) | DEP= TOBINSQ | |||||
| New firm | Old firm | |||||
| CEO_TENURE | 0.0399 | 0.1264 | −0.0076 (−0.69) | 0.0401 (1.32) | ||
| CEO_TENURE2 | −0.0047 | −0.0026 | ||||
| Ln(CEO_TENURE) | 0.2081 | −0.0011 (−0.01) | ||||
| Controls | CEO_AGE, CEO_GENDER, CEO_FOUNDER, CEO_DUAL, SIZE, LEV and LOSS | |||||
| Constant | 9.4910 | 9.0588 | 9.02410 | 1.3999 (0.59) | 1.0762 (0.32) | 1.8422 (0.69) |
| YEAR_FE | Yes | Yes | Yes | Yes | Yes | Yes |
| INDUSTRY_FE | Yes | 911 | Yes | Yes | Yes | Yes |
| Adj | 0.1811 | 0.1896 | 0.1888 | 0.1792 | 0.1812 | 0.1810 |
| 782 | 782 | 765 | 700 | 700 | 700 | |
| Variable(s) | DEP = TOBINSQ | |||||
| MATURE = 0 | MATURE = 1 | |||||
| CEO_TENURE | 0.0239 | 0.1119 | 0.0390 (1.42) | −0.0329 (−0.62) | ||
| CEO_TENURE2 | −0.0036 | −0.0048 (−1.24) | ||||
| Ln(CEO_TENURE) | 0.1411 | 0.0988 (0.89) | ||||
| Controls | CEO_AGE, CEO_GENDER, CEO_FOUNDER, CEO_DUAL, SIZE, LEV and LOSS | |||||
| Constant | 5.1911 | 5.1121 | 5.5871 | 11.2415 | 12.2450 | 10.1670 |
| YEAR_FE | Yes | Yes | Yes | Yes | Yes | Yes |
| INDUSTRY_FE | Yes | Yes | Yes | Yes | Yes | Yes |
| Adj R2 | 0.2095 | 0.2214 | 0.2064 | 0.5095 | 0.5254 | 0.5301 |
| 765 | 765 | 765 | 108 | 108 | 108 | |
Note(s): Panel A reports the regression results testing the relationship between CEO tenure and firm performance in the context of firm product market competition. All variable definitions are in Appendix. ***, ** and * represent statistical significance at the 1, 5 and 10% levels, respectively (two-tailed tests); Panel B reports the regression results of testing the relationship between CEO tenure and firm performance in the context of audit quality. All variable definitions are in Appendix. ***, ** and * represent statistical significance at the 1, 5 and 10% levels, respectively (two-tailed tests); Panel C reports the regression results of testing the relationship between CEO tenure and firm performance in the context of firm age. All variable definitions are in Appendix. ***, ** and * represent statistical significance at the 1, 5 and 10% levels, respectively (two-tailed tests); Panel D reports the regression results of testing the relationship between CEO tenure and firm performance in the context of the firm life cycle. All variable definitions are in Appendix. ***, ** and * represent statistical significance at the 1%, 5% and 10% levels, respectively (two-tailed tests)
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