Research On Rent-seeking Effects Of "CEO-Chairman Duality"

As for the problem of “CEO-Chairman Duality” currently, whether it is theprincipal-agent theory, the modern butler theory, or the resource dependence theory, the mostsignificant thing is to see which way can better balance the interests of both parties or theinterests of multi, then to ensure the maximization of shareholders’ equity and the sounddevelopment and good performance of the corporate. Following the economic crisis in2007,for all the companies, facing increasingly severe economic situations and the fierce marketcompetition, have managers who can effectively making decision and always taking theinterests of the company’s owner first is necessary. But now the rent-seeking effect ofmanagers, especially the huge pay gap between workers and managers, and also on-the-jobconsumption got attentions from the media and the population, the paper will do researcheson rent-seeking effects of “CEO-Chairman Duality” and the rent-seeking ways.After learn and sort out the relevant research literature, firstly, the article makesdescriptive statistics of the domestic companies from different angles; secondly, based onclassic value model, we do empirical analysis of the domestic listed companies’ rent-seekingeffect with “CEO-Chairman Duality”. Taking into account that the corporate cash distributioncan reflects the size of the rent-seeking space, and will affects the rent-seeking motives of themanagement, thus affecting the value of cash holdings. Rely on the amended Fama andFrench (1998) regression model, with the introduction of the cross-variable “CEO-Chairmanrelations” and “Cash holding value “,we inspected the effects of “CEO-Chairman relations”on the value of cash holdings to reveal the rent-seeking effect of “CEO-Chairman Duality”and the ways of rent-seeking. The empirical results show that all the listed companies(excluding financial listed and the ST enterprises), there exists apparent rent-seeking effects incompanies with “CEO-Chairman Duality”. After that, cross variables were added to the model,the cross-variable of the salaries in currency and “CEO-Chairman relations”, and thecross-variable of the on-the-job consumption and “CEO-Chairman relations”, further analysisreveals that salaries in currency and on-the-job consumption are possible rent-seeking ways,CEO of the companies with “CEO-Chairman Duality” is more likely to do rent-seeking things.“CEO-ChairmanDuality” has apparent rent-seeking effect, reduces the value ofcash holdings,reducing the enterprise value and the interests of shareholders. In the sub-sample study wefound that: the state-owned sub-samples, the executives currency is the major route ofrent-seeking for CEO, as for private sub-sample, the on-the-job consumption is the majorroute of rent-seeking. According to the empirical results, the paper argues that the separation of the two roles ismore suitable for domestic listed companies, the Government should strengthen theconstruction of the relevant rules and regulations, also the companies should make theirinternal control work well, work together to reduce the rent-seeking in companies.