Mathieu

· 346 words · 2 minute read

Influence of CEO Pol. Ideology on Corporate Governance 🔗

  • I like the subject a lot, very clear, simple, but interesting question

  • Two dependent variables:

    • Corporate Scandals
    • Corporate Governance Performance

  • 1st remark: “performance” is still a blurry concept, maybe good to use a less abstract term in the abstract

  • No need to explain data collection, sample in the abstract. (After you have the results, you can provide a short summary)

  • Better focus on a short (theoretical) argument why CEOs pol. ideology influences scandals (what is a scandal, how does it differ materially from ordinary corp. governance policy)

Introduction 🔗

  • Friedman not necessarily “introduces” agency theory

  • Provides a (normative) perspective on what business should do

  • Formal treatment of agency theory can be found in Grossman and Heart (1992)

  • Your treatment about how and why scandals can happen should follow from this perspective (imo), not necessarily from difference in normative visions of business

  • The empirical literature you cite is good and appropriate

  • You have a nice build-up about why CEO characteristics in general can influence firm policy (“A CEO has discretion due to imperfect monitoring”)

  • But, the introduction of your hypothesis is very ad hoc - why exactly political ideology

  • Give a nice example or cite literature

  • Also, address the principal methodological challenges to identifying an effect (firms who might be more prone to scandals might be more prone to hire CEO’s with a certain political ideology) - and what you do to take that into account

Lit. Rev 🔗

  • I would like to see section 2.1 expand more about principal-agent theory of firms

  • Section 2.2 introduces the various aspects of corp. governance you are about to test

  • 2.3 is a little bit ad hoc, what is the point of writing about ratings? Do you use it? Then, it should be in methodology

  • In 2.5, are there also theoretical frameworks that incorporate CEO ideology, as opposed to empirical research?

Methodology 🔗

  • Why pooled OLS analyses? Maybe it could be useful to exploit only within-firm observations / Fixed-effects model
  • This can also tackle some of the endogeneity issues you describe