Central European Business Review X:X | DOI: 10.18267/j.cebr.395

Does CEO Ownership in High-Tech Companies Affect Corporate Financial Decisions?

Elżbieta Bukalska ORCID...1, Jakub Czerniak2, Irmina Florek ORCID...3
1 Maria Curie Skłodowska University in Lublin, Faculty of Economics, Department of Corporate Finance and Accounting, Pl. M. C. Skłodowskiej 5, 20-031 Lublin, Poland. Email: elzbieta.bukalska@mail.umcs.pl (corresponding author)
2 Maria Curie Skłodowska University in Lublin, Faculty of Economics, Department of Microeconomics and Applied Economics, Pl. M. C. Skłodowskiej 5, 20-031 Lublin, Poland. Email: jakub.czerniak@mail.umcs.pl
3 Maria Curie Skłodowska University in Lublin, Doctoral School of Social Sciences, ul. Weteranów 18, 20-038 Lublin, Poland. Email: irmina.florek@mail.umcs.pl

The role of high-tech companies increases in turbulent times. Additionally, the status of the company (high-tech or non-high-tech) affects financial decisions. Moreover, CEOs with ownership in the company they work for make specific financial decisions. The paper aims to identify the impact of CEO ownership on financial decisions in high-tech companies. The sample consists of 750 manufacturing firm-year observations from the period 2018-2021. All the companies included in the research are listed on Warsaw Stock Exchange. Linear Mixed Models analysis with individual and interactive effects were implemented. Findings show that high-tech companies managed by CEOs with a stake in a company differ from the rest: they are smaller, have higher cash ratios, and have lower debt ratios. However, in high-tech companies, CEOs with a stake in the company impact investment expenditure, debt ratio, and cash holdings - positively. The originality of this research lies in including the interactive impact of CEO ownership and high-tech companies on financial decisions. The findings might be important for investors who want to invest in high-tech companies with a CEO as an owner.
Implications for Central European audience: The findings might be important for other Central Eastern European countries and listed companies. The findings are important for investors who consider investing in companies managed by a CEO having a stake in the company as CEO ownership might lead to empire-building behavior or rent extraction. The findings are important for policymakers as the cautious financing policy (mostly based on equity) of high-tech companies might affect the efficiency of public aid. The evidence was provided that is important for the theoretical discussion on financial decisions and CEO ownership in a specific type of companies (high-tech companies).

Keywords: CEO ownership; high-tech companies; pecking order theory

Received: September 10, 2024; Revised: November 30, 2024; Accepted: December 10, 2024; Prepublished online: April 14, 2025 

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