Do CEOs' Industry Tournament Incentives Affect Stock Liquidity?

IF 4.6 3区管理学 Q1 BUSINESS

Corporate Governance-An International Review Pub Date : 2024-10-28 DOI:10.1111/corg.12623

Hasibul Chowdhury, Mostafa Monzur Hasan, Hoang Luong, Suichen Xu

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引用次数: 0

Abstract

Research Question/Issue

We examine the relationship between CEOs' industry tournament incentives (CITI) and stock liquidity in the United States. We also examine if the effect of CITI on stock liquidity varies depending on the information-asymmetry and corporate governance mechanisms.

Research Findings/Insights

We find that firms with stronger CITI are associated with greater stock liquidity. Exploiting the enforceability of executive noncompetition agreements across the states in the United States as a quasi-natural experiment, we find that firms headquartered in states that introduce these agreements on average experience lower stock liquidity, suggesting a causal relation. We also find that the effect of CITI on stock liquidity is stronger among firms with severe information-asymmetry problems, but weaker among firms with strong governance mechanisms.

Theoretical/Academic Implications

We extend research that examines the impacts of CEO industry tournament incentives on corporate outcomes and strategies. Our paper shows that CEO industry tournament incentives matter for stock liquidity. Our paper contributes to a large literature on the roles of CEO styles and behaviors in shaping corporate policies.

Practitioner/Policy Implications

Our findings have several practical implications for investors, policymakers, and financial analysts. For example, our findings can help investors better understand how CEOs' compensation-based incentives impact stock liquidity. Similarly, policymakers can use our findings to design policies that encourage CEOs to act in the best interest of their shareholders and promote market efficiency.

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ceo的行业竞赛激励会影响股票流动性吗？

我们研究了美国ceo的行业竞赛激励（CITI）与股票流动性之间的关系。我们还研究了花旗对股票流动性的影响是否取决于信息不对称和公司治理机制。研究结果/见解我们发现，CITI越强的公司，其股票流动性越大。利用美国各州行政竞业禁止协议的可执行性作为准自然实验，我们发现总部设在引入这些协议的州的公司平均股票流动性较低，这表明存在因果关系。我们还发现，花旗对股票流动性的影响在信息不对称问题严重的公司中更强，而在治理机制强的公司中更弱。理论/学术意义我们扩展了CEO行业竞赛激励对公司成果和战略的影响的研究。我们的研究表明，CEO行业竞赛激励对股票流动性有影响。我们的论文为大量关于CEO风格和行为在制定公司政策中的作用的文献做出了贡献。我们的研究结果对投资者、政策制定者和金融分析师有几个实际意义。例如，我们的研究结果可以帮助投资者更好地理解ceo薪酬激励如何影响股票流动性。同样，政策制定者可以利用我们的研究结果来设计政策，鼓励首席执行官为股东的最佳利益行事，并提高市场效率。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Corporate Governance-An International Review Multiple-

CiteScore

7.00

自引率

11.30%

发文量

期刊介绍： The mission of Corporate Governance: An International Review is to publish cutting-edge international business research on the phenomena of comparative corporate governance throughout the global economy. Our ultimate goal is a rigorous and relevant global theory of corporate governance. We define corporate governance broadly as the exercise of power over corporate entities so as to increase the value provided to the organization"s various stakeholders, as well as making those stakeholders accountable for acting responsibly with regard to the protection, generation, and distribution of wealth invested in the firm. Because of this broad conceptualization, a wide variety of academic disciplines can contribute to our understanding.