Research On The Influence Of CEO Power Of Gem Listed Companies On Corporate Performance

This study was focus on the CEO power of the company.In order to analysis the association of the CEO' power on company performance and its volatility,I selected 193 firms which are listed companies on GEM from 2013 to 2015 as participants.Meanwhile,I add the external institutional environment as adjustment variable to examine the possible relationship between external environment,the power of CEO,firm performance and its volatility.On the basis of combing the relevant research literature and studies,I put forward the corresponding hypothesis.Drawing lessons from the previous research and combining with the actual situation of China's GEM listed companies,I selected eight specific indicators to measure the power of CEO.Under the premise of quantifying CEO power and considering the selection of relevant control variables and dependent variables,I set the relevant models for regression analysis.The results of this empirical study show that CEO power is negatively correlated with firm performance and its volatility,but not significant with performance volatility for enterprises listed on the GEM.Powerful CEO may lead to poor performance and bring less operational risk simultaneously.When appointing a company CEO,the board must weigh the pros and cons of the size of its power to ensure that maximize company performance under the premise of stabilizing operational risk.In addition,the empirical results also show that a good external system environment can have a positive impact on the company's performance.When the enterprise is in a more perfect external system environment the negative relationship between CEO power and firm performance can be weakened.Thus it can be seen that the improvement of governance environment in various regions has great significance to promote the development of enterprises listed on the GEM and local economy.