CEO Characteristics, Firm Policy, and Firm Performance

  • Rahmat Setiawan Faculty of Economics and Business, Universitas Airlangga, Indonesia
  • Lila Gestanti Faculty of Economics and Business, Universitas Airlangga, Indonesia
Keywords: Female CEO, CEO education, CEO age, financing policy, firm performance


This research aims to investigate the effect of CEO characteristics (female gender, education, and age) on the financing policy (interest-bearing debt to total assets), investing policy (capital expenditure), and firm performance (return on assets) when it is controlled by firm size and firm age. Our research uses the data of the manufacturing companies listed on the Indonesia Stock Exchange (IDX) in the period 2010 - 2017. The results of our research show that female CEOs have a significant negative effect on financing policy. This has a significant positive effect on firm performance, but no significant effect on investing policy. We also found that CEO education negatively and significantly affects financing policy, but positively and significantly affects investing policy and performance. Meanwhile, CEO age has a significant negative influence on financing policy but no significant influence on investing policy and performance. Our research results support behavioral finance theory by providing empirical evidence that CEO behavioral aspects are correlated with the female gender, education, and age in terms of significantly affecting firm policies and performance. The implication of this research is that investors should know the CEO characteristics of the companies in which they invest their money because the CEO characteristics can be used as references to predict performance and CEO policy decision-making.


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How to Cite
Rahmat Setiawan, & Lila Gestanti. (2022). CEO Characteristics, Firm Policy, and Firm Performance. International Journal of Business and Society, 23(1), 371-389.