The effects of market competition, capital structure, and CEO duality on firm performance: A mediation analysis by incorporating the GMM model technique

This current study is one of the few investigations to conduct a focalized examination of the relationship between CEO duality and firm performance; however, this relationship seems to be imprecise due to the impact of the invention mechanism. This study explores the effect of CEO duality to achieve firm performance through the mediating effects of capital structure and market competition, which is an innovative model. The study incorporated the generalized method of moments (GMM) model to examine the proposed association of the CEO duality and firm performance, and the findings specified a negative relationship between CEO duality and firm performance. The results indicated that capital structure partially mediated the association between CEO duality and firm performance. The results also showed that market competition fully mediated this linkage between CEO duality and firm performance, which in turn specified a significant positive relationship with market competition, which mediated a positive relationship. By incorporating these mediators, the results determined that CEO duality reduces firm performance through the capital structure; however, it enhances firm performance by stimulating market competition.