The Moderating Role of CEO Age on the Relationship Between CEO Characteristics and Tobin’s Q
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Abstract
This study aims to analyze the impact of chief executive officer (CEO) characteristics (including gender, ownership, duality, and tenure) on the Tobin's Q value of firms, while considering the moderating role of the CEO’s age in this relationship. Tobin's Q is used as a variable to evaluate the market efficiency of listed companies. The data, comprising 380 listed companies on the Vietnam stock market from 2013-2022, were analyzed using pooled ordinary least squares (OLS), fixed effects model (FEM), and random effects model (REM) regressions. The results indicate that firms with male CEOs exhibit a negative effect on the Tobin’s Q value. Interestingly, companies with CEOs owning less than 1% of the stock demonstrate higher market efficiency compared to those with CEOs owning 1% or more. Conversely, dual CEOs have a negative effect on firms’ market performance. Furthermore, from a moderating perspective, CEO’s age strengthens the impact of CEO tenure on Tobin's Q value but weakens the effect of CEO duality on market efficiency. The findings suggest that listed companies should separate the CEO and board chairperson positions. Investors should pay closer attention to firms' governance structure and carefully consider CEO-related issues when making investment decisions to minimize risks and maximize returns. Additionally, the State Securities Commission must rigorously regulate listed companies that violate information disclosure guidelines for the stock market.
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