THE RELATIONSHIP BETWEEN THE CHIEF EXECUTIVE OFFICERS’ EDUCATION LEVEL AND FIRM PERFORMANCE: AN EMPIRICAL EXAMINATION OF SELECTED FIRMS LISTED ON BORSA ISTANBUL

Abstract

The aim of this study is to investigate the relationship between the chief executive officers’ (CEO) education level and firm performance. In the study, the relationship between the chief executive officers’ (CEO) education level and firm performance was analyzed by using the data of 229 companies which traded in different sectors registered in Borsa Istanbul (BIST) for the year 2020.  Firm performance which is the dependent variable of study was measured with two different indicators which are market-based (Tobin’s Q) and accounting-based (return on assets- ROA). The education level of the chief executive officer which is independent variable of the study is categorized as graduating from schools at domestic or abroad, having a undergraduate or postgraduate degree, having a undergraduate or postgraduate degree in business administration. As a result of the analysis, it was determined that there is a negative and statistically significant relationship between the chief executive officer’s education level having a postgraduate degree in business administration and firm performance which Tobin’s Q and ROA are used as dependent variables. On the other hand, it has been observed that there is a positive and statistically significant relationship between the chief executive officers’ education level having a postgraduate degree and firm performance which the ROA was used as a performance indicator. Another result obtained from the study is that the education level of the chief executive officers of large companies is postgraduate.