CEO power and firm opacity

Kwang Joo (KJ) Koo, Jonghwan (Simon) Kim

Research output: Contribution to journalArticle

Abstract

This paper examines the association between CEO power and firm opacity. We discuss the entrenchment and managerial power theories to develop a coherent hypothesis that captures a negative relationship. To investigate the relationship, we use CEO pay slice (CPS) and opacity index as proxies for CEO power and information environment, respectively. With alternate model specifications, we consistently find that firm opacity is positively associated with CPS. With the findings, we conclude that powerful CEOs pursue greater firm opacity–leading to poorer information environments–to hide, if any, agency issues or poor firm performance.

Original languageEnglish
Pages (from-to)791-794
Number of pages4
JournalApplied Economics Letters
Volume26
Issue number10
DOIs
Publication statusPublished - 2019 Jun 7

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All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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