Firm Performance by Thai CEOs in the SET100: Foreign or Locally Educated?

Abstract

Objective - This paper investigates firm performance effected by foreign-educated or locally educated Thai CEOs in the SET100 listed firms of Thailand. Methodology/Technique - By examiningthe resumes of 198 CEOs of Thailand's 100 largest Thai listed companies over the past 16 years (2000-2015), this paper hopes to compare the effects of this outcome on the means and variance of the CEO succession by presenting four cases: when (1) locally-educated Thai CEO is replaced by a foreign-educated Thai CEO, (2) foreign-educated Thai CEO is replaced by a locally-educated Thai CEO, (3) locally-educated Thai CEO is replaced by another locally-educated Thai CEO, and (4) foreign-educated Thai CEO is replaced by another foreign-educated Thai CEO. Findings – It was found thatthe appointment of foreign-educated CEOs in the SET100 is associated with improved firm performance with respect to the mean-variance approach if (s)he replaces a locally-educated CEO. However, firm's performance deteriorated if a foreign-educated CEO replaces another foreign-educated CEO. Novelty - Findings suggest that additional studies need to be conducted to verify the claim of that switching the education type of CEO succession can have beneficial effects on firm performance. Type of Paper - Empirical Keywords: Performance of Foreign-Educated CEOs; CEO Succession; Mean-Variance Approach; Thailand SET. JEL Classification: I21, M10