CEO Human and Social Capital and Firm Performance: Empirical Evidence from South Asian Banking Industry
DOI:
https://doi.org/10.64102/rujssbs.0481Keywords:
CEO human and social capital, Firm performance, South Asia, Banking industry, Human capital theory, Social capital theoryAbstract
This study aims to examine the impact of human and social capital attributes of CEOs on the firm performance of the banking industry in South Asia. Using sample from the banks listed in Dhaka Stock Exchange (DSE), National Stock Exchange (NSE), Pakistan Stock Exchange (PSX), and Colombo Stock Exchange (CSE) from 2016 to 2023, this study employs feasible generalized least square regression (FGLS) technique to explore the impact of CEO’s human and social capital (CHSC) on corporate outcomes. The study outcomes provide evidence that CHSC has an effect on firm performance and, to a distinct extent, underscores its strategic significance in corporate governance. We find that female CEOs produce adverse effects, while academic, professional, and foreign credentials of CEOs enhance firm performance. Experiences and social networks of CEOs boost accounting measures but reduce market measures. This research contributes to the scarce literature on corporate governance in emerging markets. The findings suggest how CHSC components facilitate making effective decisions, properly monitoring managerial activities, gaining access to required external resources, information, cutting-edge technology, and also achieving a competitive advantage that influences firm performance. The outcomes also offer practical implications for policymakers and regulators to devise corporate governance mechanisms by focusing on those CHSC elements that point out a positive impact on corporate measures. This study also offers insights for shareholders, investors, and analysts in making investment decisions and predicting firm outcomes by analyzing the CHSC features, particularly in the banking industry of an emerging markets like South Asia.
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