CEOs and the Product Market: When are Powerful CEOs Beneficial?
|Speaker:||Gordon Phillips, University of Southern California|
|Date:||Friday 17 October 2014|
We find that in rapidly changing, competitive product markets, CEO power has a positive impact on the value of the firm. Additionally, firms with powerful CEOs tend to invest and advertise more in these markets. In addition to whether the CEO also chairs the board and is the company founder, CEO “soft” power, as captured by the CEO’s connections to executives and the board of directors through appointment decisions, helps a firm react more efficiently to product market changes and threats. Our findings imply that product markets play an important role in affecting the benefits and costs of CEO power.