This dissertation consists of two chapters. The first chapter examines the valuation effect of the Q-hypothesis of mergers and acquisitions. The Q-hypothesis of mergers and acquisitions proposes that takeovers of low-Q targets by high-Q acquirers should be value creating as acquirers redeploy the targets' assets. I revisit the valuation effects of mergers and acquisitions by considering the potential costs of asset reallocation, impact from misvaluation, and the size of the reallocated assets. By examining the combined announcement returns and changes in operating performance, I find evidence consistent with both the benefits and costs of asset reallocation in the full sample of M&As from 1989 to 2010. Controlling for impact for market misvaluation in the proxy of Q, I find that the relation between value creation and the Q-difference is an inverse U-shape. This is direct evidence in support of the Q-hypothesis of M&As using firm-level data from after 1990. The results are not driven by the acquirer's corporate governance structure and the difference in industry. The second chapter investigates investigate the effect of CEO overconfidence on learning from the market in completing the announced mergers and acquisitions (M&As). Overconfident CEOs overestimate their ability to create value and believe that the market incorrectly values the firm. Therefore, they will be less likely to revise their M&A announcement according to unfavorable market reaction. I construct a proxy for CEO overconfidence based on the CEO's decisions on exercising options similar to Malmendier and Tate (2005, 2008). Controlling for the corporate governance structure of the firm, I find that an overconfident CEO is more likely to complete a bid despite unfavorable market feedback. I do not find my results are driven by alternative interpretations including managerial quality and private information. / Ph. D.

Prior research on intra-firm pay disparity suggests intra-firm pay disparity at various hierarchy levels affects firm performance and executive-level pay disparity is related to investment risk in the credit and the equity market. However, none of the studies examine the relationship between CEO-to-worker pay disparity and credit investment risk. The purpose of this study is to investigate the association between CEO-to-worker pay disparity on credit investors' risk assessments. Large CEO-to-worker pay disparity could suggest CEO rent extraction which increases credit risk or effective labor cost management that decreases credit risk. Overall results of this study indicate increased CEO-to-worker pay disparity is associated with a lower cost of debt (a higher probability of credit rating upgrades). This association weakens as the growth rate of average employee pay increases and is more pronounced for labor-intensive firms than for capital-intensive firms, suggesting credit investors incorporate the information about the effectiveness of labor cost management in CEO-to-worker pay disparity in their risk assessments. In addition, the negative relationship between the change in CEO-to-worker pay disparity and the change in the cost of debt is less salient when CEO compensation increases rapidly. Further analysis shows the association is attenuated by increased excessive CEO compensation. The findings indicate credit investors also consider the risk arising from CEO rent extraction when they evaluate CEO-to-worker pay disparity. / Ph. D.

Thesis advisor: Donald Cox / Does a CEO’s narcissism influence the company’s stock? Would it matter if it is a media company? The Efficient Market Hypothesis claims that it matters little given market efficiency, as narcissism has been priced in stock based on the Capital Asset Pricing Model. Existing literature is divided on whether CEO narcissism influences corporate efficiency. This paper refines assumptions on asset pricing by indicating when market inefficiency occurs through panel studies, which the Adaptative Market Hypothesis overlooks. A case study on Elon Musk suggests that the CEO’s narcissism with media involvement creates temporary market inefficiency. This paper innovatively combines an event study of Elon Musk's Twitter activities on Tesla and Twitter with a panel analysis of 17 S&P 500 CEOs. The finding shows that younger and female CEOs, who derive narcissism supply and lead media companies, are more inclined to take risks on stock returns. This result suggests re-evaluating stock market efficiency to include CEO demographics and personality, which extends beyond traditional CAPM models. / Thesis (BA) — Boston College, 2024. / Submitted to: Boston College. Morrissey School of Arts and Sciences. / Discipline: Economics. / Discipline: Departmental Honors.

Yes / Purpose – The purpose of this paper is to investigate the impact of insider trading on subsequent stock returns in the UK, with a specific focus on the impact of the global financial crisis of 2007-2008 on the relation between CEO and CFO stock purchases and returns. Design/methodology/approach – The empirical analysis uses 10,230 purchases executed in 679 UK firms by 1,477 directors during the period from 2000 to 2010. Subsequent market-adjusted stock returns are regressed on a set of firm-specific accounting, market and corporate governance variables as well as the characteristics of CEOs and CFOs. Additionally, the analysis distinguishes between the opportunistic and routine trades. Findings – The findings reveal that the position of the trading director and the nature of their trades are important in determining the impact on returns of insider trades. In particular, CEO purchases are on the whole more informative than CFO purchases and opportunistic purchases. The trades in the post-crisis period have a greater impact on subsequent stock returns. Research limitations/implications – The empirical analysis is limited to the trades made by two executives. Future research should consider inside trades by all directors and distinguish between executive and non-executive directors. Also, a behavioral measure should be developed to test if the financial crisis affected the trading behavior of directors and whether directors use insider trading strategically to signal information to the market. Practical implications – The impact of directors’ dealings on stock returns is not homogeneous. Financial analysts and investors should pay more attention to different types of trades and the identity of trading director. Originality/value – This paper, to the authors’ knowledge, provides the first attempt that combines in the same framework the identity and personal attributes of trading executive directors, firm-level corporate governance features, the nature of purchase transactions and the trading period characteristics. Furthermore the empirical analysis is carried out during a period that also covers the recent global financial crisis period and its immediate aftermath.

Yes / In this paper, we examine how and when chief executive offers’ (CEOs’) reputation enhances environmental innovation by considering quality management as a mediating mechanism of this relationship. In addition, we introduce stakeholder pressures (primary and secondary stakeholder pressures) as important contingencies of the relationship between CEOs’ reputation and quality management. Moreover, we test the moderating role of resource commitment on the quality management-environmental innovation relationship. We test our research model using data from a manufacturing industry sample of 217 firms from Ghana. We find that quality management mediates the relationship between reputation and environmental innovation. Moreover, the relationship between CEOs’ reputation and quality management is amplified when levels of both primary and secondary stakeholder pressures are greater. Finally, our findings show that the effect of quality management on environmental innovation is enhanced when resource commitment is greater. Implications for theory and practice are discussed.

Yes / Corporate Social Innovation (CSI) has emerged as a research priority for multinational enterprises (MNEs) due to the increasing popularity of sustainable development solutions addressing wicked problems in the 21st century. Although most studies on CSI have focused on data from developed economies, emphasising the younger generation's forward-looking, sustainable, and environmentally friendly attitudes, there exists a gap in our understanding of the attitude of the older generation towards CSI practices of MNEs operating in emerging economies. The UN's SDG 3 advocates for the well-being of all at all ages. Despite this, healthcare outcomes in global-south countries fall below standard. Therefore, we conducted an in-depth critical analysis of textual data concerning CSI practices of 115 healthcare MNEs operating in 13 emerging economies. We quantified the number of CSI practices in their annual reports and operationalised the dependent variable using an entropy index to calculate the density and percentage score of CSI. Drawing on Upper Echelons, our analysis revealed that older CEOs are likelier to promote, initiate, and implement CSI in greater depth and breadth. These findings present a compelling case supporting the argument that CEOs and board members tend to contribute more to society as they age. We offer empirical evidence supporting the strengthening roles of senior board members and female board chairs. Our findings complement existing CSI studies from developed countries and illustrate how CEO and board characteristics influence the depth and breadth of CSI in emerging economies.

This paper examines the Co-CEO model through the lens of Shared Leadership Theory, aiming to uncover how it is portrayed by executives and understand their roles and responsibilities as well as the advantages and disadvantages within this leadership model. Utilizing discourse analysis, we explore how CEOs depict the Co-CEO model in various media sources, including press releases, business publications, and podcasts. Previous research highlights the influential role of executives and the potential benefits of diverse leadership qualities, while also noting challenges such as role ambiguity and conflicts inherent in shared leadership. By analyzing executive portrayals of the Co-CEO model, we gain insights into the model's advantages and drawbacks experienced by CEOs, emphasizing the importance of collaboration, trust, and strategic alignment. The results highlight potential benefits, experienced by CEOs, during organizational transitions and growth phases, underscoring the importance of selecting Co-CEOs based on complementary skills, personal values, and compatibility.

Background: Circular economy (CE) is one of the most recent ways to address environmental sustainability. It aims to extend the value of products, materials, and resources for as long as possible, and minimize waste generation by maintaining them in the economy for as long as possible to mitigate climate change, lowering greenhouse gas emissions, and resource short­ages. Businesses play a crucial part in protecting the environment and have been urged to incorpo­rate CE practices. Leadership and top management have been found crucial for the transi­tion and the CEO has the power to shape strategic plans and directions for the company. Despite the growing research on CE and what influences the transition, literature on individual roles of the top management team is scarce. Existing literature focuses on different factors driv­ing the transition but not the specific roles of the top management team. Purpose: The purpose of this research is to add to the literature regarding CE and how the CEO influences the transition. With this research, we aim to contribute to the current discussion on the transition towards CE, both theoretically and practically. Method: We have conducted a qualitative study with an inductive approach. It follows a relativist ontology and a social constructionism viewpoint. The methodology is an exploratory multi­ple-case study where the companies were selected by purposive sampling. Five companies were selected and in total 16 semi-structured interviews were conducted where we gathered data from both CEOs and their employees. The data was analyzed by combining the Goioa method with Eisenhardt’s multiple case study approach. Conclusion: Based on our findings we identified that the CEO influences the transition towards CE. We distinguished the CEO role within top management and found that they influence CE through strategic management and power. Within strategic management, the CEO influences through setting the strategy, being the decision maker, allocating resources, and setting the direc­tives and goals for the organization. The aspect of power was found to influence the inter­nal organization and external parties. Additionally, we showed how these contributions can be applied practically.

Background: CEO succession is a critical process in organizations, marked by its potential for disruption andstrategic changes. CEO succession can significantly influence corporate strategy, with the CEOwielding considerable power in shaping organizational direction. As part of corporate strategy,internationalization is considered one of the most important future priorities in many familybusinesses. It holds the potential to help those businesses survive in an increasingly competitivebusiness environment while also maintaining the business for generations to come. As the CEOsuccession entrusts a new person with a role that can have a significant influence oninternationalization, the challenge is to ensure that this person not only follows financial goalsin internationalization but also balances non-financial goals. This is because family businessesgenerally attach great importance to SEW, which are non-financial attributes. An influence ofthe CEO successor on internationalization that is not in line with the SEW could therefore beundesirable for the family businesses. Hence, choosing an appropriate CEO becomes crucial. Purpose: This study aims to examine how CEO succession influences the internationalization of familybusinesses. The study intends to contribute to the current literature by investigating theindividual influence of CEO successors on internationalization, offering both theoreticalinsights and practical implications. By identifying the diverse outcomes associated withdifferent succession types, this research intends to support family businesses to better predictand anticipate the consequences of CEO succession and internationalization. Method: The methodology of this study follows an ontological relativism approach, meaning weacknowledge that multiple truths exist. This further aligns with our epistemological stance onsocial constructionism. The basis of our master thesis is built on a qualitative study followingan inductive approach to generate new theories arising from the empirical data collected.Therefore, we conducted an exploratory interview study and analyzed the acquired dataaccording to the Gioia method. The sampling of our interviewees was done purposively byincluding predefined selection criteria. Conclusion: This paper examines how CEO succession in family businesses affects their internationalizationstrategies, considering successors from within the family, internal employees, and externalhires. It was found that all types of successors can influence internationalization, yet withvarying outcomes as a result. Intra-family successors, while not necessarily having a greaterinfluence on the board, often align with family values, leading to continuity in internationalstrategy. Internal employee successors tend to maintain existing strategies, benefiting fromfirm-specific knowledge, while external successors may bring about strategic changes due totheir outside perspectives and lack of familiarity with the family culture. Various factors caneither reverse or strengthen the successors' influence on internationalization.

La Thaïlande est un État unitaire et depuis 1892 son administration déconcentrée est assurée par la présence de gouverneurs provinciaux. Or, malgré de nombreuses attributions législatives, l'exercice des fonctions du chef de la province se heurte à plusieurs obstacles dans la pratique. A titre d'exemple, l'unité de commandement du gouverneur provincial était souvent contestée, les pouvoirs qui lui ont été délégués par les autorités centrales étaient inappropriés tant à sa fonction qu'à ses responsabilités. Ceci était une source de lenteur de l'administration provinciale dans son ensemble. Puis, comme la province ne pouvait pas bénéficier directement du budget provenant de l'État car la demande de budget provincial était effectuée au nom de la Direction, les projets réalisés sur place ne convenaient donc pas aux besoins des habitants locaux. Enfin, l'absence de coopération entre les fonctionnaires des différents organes dans la province contribuait alors aux chevauchements des travaux de ces organes et causait par la suite une perte de temps et d'argent pour l'État. Ainsi, lors de la réforme en 2001, le gouvernement de l'époque a introduit au niveau provincial le concept du gouverneur « CEO » et la méthode de la gestion d'intégration (MGI). Le chef de la province endosse alors le rôle du Chief Executive Officer (CEO), de ce fait ses pouvoirs ont été renforcés afin qu'il puisse prendre une décision rapide et efficace en réponse aux problèmes survenus dans sa province à l'instar des CEO dans leurs entreprises. Quant à la province, elle applique la MGI qui est une nouvelle façon de travailler visant à rendre de meilleurs services rendus à la population. / Thailand is a unitary state and since 1892 its deconcentrated administration is ensured by the presence of provincial governors. However, despite numerous attributions recognized by the laws, the provincial governor faces several obstacles in practice. For example, his Unity of Command was often challenged, the powers delegated to him by the central authorities were not only inappropriate to his function but also to his responsibilities. This was actually a source of slowness in provincial administration. Then, because the province could not directly benefit the budget from the State, as the process of demand for provincial budget was conducted on behalf of the Department, the projects that were carried out did not necessarily match up with local's need. Finally, the lack of cooperation between officials of different organs who work in the province contributed to an overlap of works and caused thereafter a waste of time and money to the State. Therefore, during the reform in 2001, the then government introduced the concept of "CEO" provincial governor and the system of "Province's Integrated Management - PIM". The provincial governor endorses hereupon the role of Chief Executive Officer (CEO), for this reason, his powers have been reinforced so that he can make a fast and effective decision in response to problems occurring in his province like the CEOs to their companies. As for the province, the system of PIM is applied and it is a new way of working which aims to provide a better service for the population.