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

Objective – This paper investigates firm performance effected by foreign-educated or locally educated CEOs in the SET100 listed firms of Thailand. Methodology/Technique – By examining the resumes of 198 CEOs of Thailand's 100 largest Thai listed companies over the past 16 years (2000-2015), this paper compares the effects 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 that the 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. Moreover, replacing a foreign-educated CEO with a locally-educated CEO also resulted in improved firm performance. Novelty – Findings suggest that switching to foreign-educated CEOs from locally-educated CEOs, and vice-versa, can help improve firm performance, thereby indicating the merit of some kind of 'disruption' effect as relates to CEO replacement. Type of Paper: Empirical