Insights from the Dhaka Stock Exchange on CEO Duality and Its Impact on Performance in Bangladesh's Manufacturing Firms

Authors

  • Kavita Panjwani Associate Professor, Division of Business and Finance, The University College of the Cayman Islands, Cayman Islands
  • Sayna Islam Diba MBA, Research Scholar, Finance and Banking Department. The University of Barishal, Bangladesh
  • Md Al Insan BangaBandhu Sheikh Mujibur Rahman Science and Technology university, Gopalganj, Bangladesh

DOI:

https://doi.org/10.59529/gbej.v6i1.41

Keywords:

Corporate Firm performance, CEO Duality, System GMM, Tobin's Q, Return on Equity, Return on Assets, Stock exchange

Abstract

This research uses a dynamic panel data method and two-step System Generalised Method of Moments (SGMM) techniques to examine how CEO duality affects the performance of 109 manufacturing companies listed on the Dhaka Stock Limited in Bangladesh from 2014 to 2023. The results indicate that CEO duality impacts firm performance in different ways. Specifically, CEO duality does not significantly affect ROA, suggesting that when a CEO also serves as chairman, they might make biased choices related to internal and external financing and overall decision-making. CEO duality positively impacts ROE, allowing the CEO to resolve conflicts of interest and corporate governance issues, thereby enhancing long-term profitability. CEO duality negatively affects Tobin's Q, indicating that much power is focused in one place. This reduces how well the board can oversee and manage the actions of the CEO. It allows the CEO to focus more on personal or immediate benefits rather than long-term company growth, which results in a decrease in market value as indicated by Tobin's Q. As a result, policymakers and corporate boards should evaluate the trade-offs associated with CEO duality, such as increasing board independence or restricting CEO power concentration. We used the Two-Step Difference GMM Model as a robustness check, which yielded the same findings as the Two-Step System GMM.

Author Biographies

Kavita Panjwani, Associate Professor, Division of Business and Finance, The University College of the Cayman Islands, Cayman Islands

 

Kavita Panjwani, PhD, is an associate professor in the Division of Business and Finance at the University College of the Cayman Islands (UCCI). She is a member of Sigma Beta Delta, an international honor society. With over 22 years of experience, Dr. Panjwani has built a successful career in academia, research, and administration. Dr. Panjwani has presented and published research papers at national and international conferences/seminars and in refereed journals. She also authors two books, Business Accounting and Managerial Economics. Dr. Panjwani also serves as a member of the editorial board and panel of reviewers in various journals.

Sayna Islam Diba, MBA, Research Scholar, Finance and Banking Department. The University of Barishal, Bangladesh

Sayna Islam Diba is a research scholar with an MBA from the University of Barishal's Finance and Banking Department. In 2023, she received the Dean's Merit Award for her exceptional BBA performance. Her involvement in several international conferences, seminars, and workshops is noteworthy. She also obtained important experience as an intern at Exim Bank Limited. Her research interests include capital markets, CEO duality, gender diversity, corporate governance, capital structure, fintech, and sustainability. She works as a research assistant under the supervision of Dr. Kavita Panjwani. Her dream job would be in academics.

Md Al Insan, BangaBandhu Sheikh Mujibur Rahman Science and Technology university, Gopalganj, Bangladesh

Research scholar, Department of Psychology, Bangabandhu Sheikh Mujibur Rahman Science and Technology University, Gopalganj-8100.

Additional Files

Published

2025-02-02

How to Cite

Panjwani, K., Diba, S. I., & Insan, M. A. (2025). Insights from the Dhaka Stock Exchange on CEO Duality and Its Impact on Performance in Bangladesh’s Manufacturing Firms. Global Business and Economics Journal (GBEJ), 6(1). https://doi.org/10.59529/gbej.v6i1.41

Issue

Vol. 6 No. 1 (2025): Global Business and Economics Journal (GBEJ)

Section

Articles

License

Copyright (c) 2025 Md Al Insan, Panjwani, Diba

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.