CEO Career Horizon, CEO Power, Corporate Governance and Earnings Quality: Evidence from Egypt

This study analysed the determinants of firms’ reported earnings quality (hereafter FREQ) for Egyptian firms from 2008 to 2019, using panel data. The Chief Executive Officer (CEO) career horizon (a CEO approaching retirement) is negatively associated with FREQ; CEO power dynamics (CEO duality, CEO s...

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Published in:Review of Economics and Finance
Main Author: Hemdan D.A.M.; Hasnan S.; Saif-Ur-Rehman; Ali M.M.
Format: Article
Language:English
Published: REF Press 2023
Online Access:https://www.scopus.com/inward/record.uri?eid=2-s2.0-85151163949&doi=10.55365%2f1923.x2023.21.14&partnerID=40&md5=f320e64577e84d2e901c15d682211822
id 2-s2.0-85151163949
spelling 2-s2.0-85151163949
Hemdan D.A.M.; Hasnan S.; Saif-Ur-Rehman; Ali M.M.
CEO Career Horizon, CEO Power, Corporate Governance and Earnings Quality: Evidence from Egypt
2023
Review of Economics and Finance
21

10.55365/1923.x2023.21.14
https://www.scopus.com/inward/record.uri?eid=2-s2.0-85151163949&doi=10.55365%2f1923.x2023.21.14&partnerID=40&md5=f320e64577e84d2e901c15d682211822
This study analysed the determinants of firms’ reported earnings quality (hereafter FREQ) for Egyptian firms from 2008 to 2019, using panel data. The Chief Executive Officer (CEO) career horizon (a CEO approaching retirement) is negatively associated with FREQ; CEO power dynamics (CEO duality, CEO stock ownership, CEO tenure, and CEO political connections) negatively affect FREQ; and board independence significantly moderates (weakens) the negative impact of CEO ownership and CEO tenure on FREQ. The findings do not support the weakening or substitution role of board independence for the negative impact of CEO career horizon, CEO duality and CEO political connections on FREQ. The presence of gender-critical mass serves as a substitution mechanism for the negative impact of CEO career horizon and CEO power dynamics (duality, ownership, tenure, and political connections) on FREQ. The findings on the interplay among CEO power dynamics shows that CEO duality, CEO ownership and CEO tenure augment each other in their negative role in determining FREQ. CEO educational level substitutes the negative impacts of CEO ownership and CEO tenure on FREQ. Principal analysis was observed for robustness through propensity matching score and difference-in-difference (DID) techniques. This study adds new knowledge by exploring the negative consequences of CEO career horizon and CEO power dynamics, and provides insights into the constraining role of corporate governance, strengthens reverse-causality, and uses DID approach and propensity matching techniques. Copyright © 2023– All Rights Reserved.
REF Press
19237529
English
Article
All Open Access; Hybrid Gold Open Access
author Hemdan D.A.M.; Hasnan S.; Saif-Ur-Rehman; Ali M.M.
spellingShingle Hemdan D.A.M.; Hasnan S.; Saif-Ur-Rehman; Ali M.M.
CEO Career Horizon, CEO Power, Corporate Governance and Earnings Quality: Evidence from Egypt
author_facet Hemdan D.A.M.; Hasnan S.; Saif-Ur-Rehman; Ali M.M.
author_sort Hemdan D.A.M.; Hasnan S.; Saif-Ur-Rehman; Ali M.M.
title CEO Career Horizon, CEO Power, Corporate Governance and Earnings Quality: Evidence from Egypt
title_short CEO Career Horizon, CEO Power, Corporate Governance and Earnings Quality: Evidence from Egypt
title_full CEO Career Horizon, CEO Power, Corporate Governance and Earnings Quality: Evidence from Egypt
title_fullStr CEO Career Horizon, CEO Power, Corporate Governance and Earnings Quality: Evidence from Egypt
title_full_unstemmed CEO Career Horizon, CEO Power, Corporate Governance and Earnings Quality: Evidence from Egypt
title_sort CEO Career Horizon, CEO Power, Corporate Governance and Earnings Quality: Evidence from Egypt
publishDate 2023
container_title Review of Economics and Finance
container_volume 21
container_issue
doi_str_mv 10.55365/1923.x2023.21.14
url https://www.scopus.com/inward/record.uri?eid=2-s2.0-85151163949&doi=10.55365%2f1923.x2023.21.14&partnerID=40&md5=f320e64577e84d2e901c15d682211822
description This study analysed the determinants of firms’ reported earnings quality (hereafter FREQ) for Egyptian firms from 2008 to 2019, using panel data. The Chief Executive Officer (CEO) career horizon (a CEO approaching retirement) is negatively associated with FREQ; CEO power dynamics (CEO duality, CEO stock ownership, CEO tenure, and CEO political connections) negatively affect FREQ; and board independence significantly moderates (weakens) the negative impact of CEO ownership and CEO tenure on FREQ. The findings do not support the weakening or substitution role of board independence for the negative impact of CEO career horizon, CEO duality and CEO political connections on FREQ. The presence of gender-critical mass serves as a substitution mechanism for the negative impact of CEO career horizon and CEO power dynamics (duality, ownership, tenure, and political connections) on FREQ. The findings on the interplay among CEO power dynamics shows that CEO duality, CEO ownership and CEO tenure augment each other in their negative role in determining FREQ. CEO educational level substitutes the negative impacts of CEO ownership and CEO tenure on FREQ. Principal analysis was observed for robustness through propensity matching score and difference-in-difference (DID) techniques. This study adds new knowledge by exploring the negative consequences of CEO career horizon and CEO power dynamics, and provides insights into the constraining role of corporate governance, strengthens reverse-causality, and uses DID approach and propensity matching techniques. Copyright © 2023– All Rights Reserved.
publisher REF Press
issn 19237529
language English
format Article
accesstype All Open Access; Hybrid Gold Open Access
record_format scopus
collection Scopus
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