Do CEO Traits Matter? A Machine Learning Analysis Across Emerging and Developed Markets

Do CEO Traits Matter? A Machine Learning Analysis Across Emerging and Developed Markets

This study investigates the relationship between CEO characteristics and firm performance across emerging and developed economies using both panel regression and machine learning techniques. Drawing on Upper Echelons Theory, we examine whether CEO age, tenure, gender, founder status, and appointment...

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Bibliographic Details
Main Authors: Chioma Ngozi Nwafor, Obumneme Z. Nwafor, Chinonyerem Matilda Omenihu, Madina Abdrakhmanova
Format: Article
Language:English
Published: MDPI AG 2025-07-01
Series:Administrative Sciences
Subjects:
CEO characteristics
firm financial performance
machine learning
corporate governance
emerging market
Online Access:https://www.mdpi.com/2076-3387/15/7/268
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Summary:This study investigates the relationship between CEO characteristics and firm performance across emerging and developed economies using both panel regression and machine learning techniques. Drawing on Upper Echelons Theory, we examine whether CEO age, tenure, gender, founder status, and appointment origin influence Return on Assets (ROA), Return on Equity (ROE), and market-to-book ratio. We apply the fixed and random effects models for inference and deploy random forest and XGBoost models to determine the feature importance of each CEO trait. Our findings show that CEO tenure consistently predicts improved ROE and ROA, while CEO age and founder status negatively affect firm performance. Female CEOs, though not consistently significant in the baseline models, positively influence market valuation in emerging markets according to interaction models. Firm-level characteristics such as size and leverage dominate CEO traits in explaining performance outcomes, especially in machine learning rankings. By integrating machine learning feature importance, this study contributes an original approach to CEO evaluation, enabling firms and policymakers to prioritise leadership traits that matter most. The findings have practical implications for succession planning, diversity policy, and performance-based executive appointments.
ISSN:2076-3387

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