Motivation or Burden? A Literature Review of Duel Governance Effect of Executive Reputation and Prospects

Xu Ning, Wu Haoyu, Wang Shuai

Foreign Economics & Management Vol. 39, Issue 10, pp. 102 - 113 (2017)  DOI:10.16538/j.cnki.fem.2017.10.007

Abstract

Executive reputation is an important issue in the field of corporate governance research. In recent years, many valuable research achievements have been accumulated, but do not reach a consistent conclusion. Will executive reputation be able to give executives power or become a burden? Based on a literature review of executive reputation and its governance effects, this paper summarizes contribution view, competence view and synthesis view of the concept of executive reputation and clarifies the factors that affect the formation of executive reputation. Secondly it interprets efficient contracting hypothesis and rent extraction hypothesis and their theoretical basis, reveals the causes of the " double-edged sword” of executive reputation from the perspectives of unique attributes such as long-term nature, binding, implicitness and vulnerability, and constructs the theoretical framework of the utility research of executive reputation. And based on this, this paper analyzes the dual utility of executive reputation on corporate performance, earnings management, executive compensation, stakeholders’ behavior, corporate strategy decision, corporate resource acquisition and other dependent variables, and the context variables that influence the strength of its governance effect. Finally, it gives a prospect for the outstanding frontier issues in order to provide a useful reference for further research and enterprise practice.

Keywords

executive reputation; duel governance effect; stakeholder; context factor