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/lp/emerald-publishing/ceo-power-and-labor-productivity-pp2WZq0VEC
- Publisher
- Emerald Publishing
- Copyright
- Copyright © Emerald Group Publishing Limited
- ISSN
- 1030-9616
- DOI
- 10.1108/ARJ-05-2016-0056
- Publisher site
- See Article on Publisher Site
Abstract
PurposeThis paper aims to examine how Chief Executive Officer (CEO) power affects firm-level labor productivity.Design/methodology/approachThe authors rely on regression analysis to examine the relation between CEO power and labor productivity.FindingsFollowing prior research (i.e. the sequential rank order tournament theory), the authors predict that powerful CEOs lead to high labor productivity. They find a significant and positive relationship between CEO power and labor productivity. They further decompose labor productivity into labor efficiency and labor cost components and find a positive (negative) relationship between CEO power and labor efficiency (cost) component, suggesting that more powerful CEOs better manage labor efficiency and control labor cost. The results are also robust to various additional tests.Originality/valueThis study contributes to two streams of research: the CEO power literature in finance and the labor productivity and cost literature in accounting. To the best of the authors’ knowledge, it is the first study that performs a direct empirical test on the relation between CEO power and labor productivity.
Journal
Accounting Research Journal – Emerald Publishing
Published: Jul 1, 2019