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Purpose – Many factors like CEO ("the chief executive officer") decision can influence efficiency and productivity in insurance firms. This paper seeks to address this issue. Design/methodology/approach – To test the effect of CEO power on the efficiency and the productivity of the European insurance industries, the authors use the flexible Fourier cost function and they decompose the total factor productivity growth. Findings – The result shows that after the integration of the CEO power score, not only efficiency scores in each country have changed, but also the order of non-life insurance systems. Also, the CEO power influences the growth of productivity and an optimal power of the CEO can allow the insurance firm to be more productive and more efficient. Originality/value – In this paper the authors model a new cost function in which they include the CEO power score; they also decompose the total factor of productivity in which they include the effect of the growth in the CEO power score. [ABSTRACT FROM AUTHOR]

This study tries to extend previous works on behavioral corporate finance by examining the interaction between investment cash flow sensitivity and various CEO characteristics in either the existence or inexistence of managerial optimism. Using a Q-investment model and departing from a sample of 475 annual observations, our results highlight that CEO's financial education, CEO's ownership and their optimism bias can explain distortions in corporate investment policy since they affect investment cash flow's relationship. [ABSTRACT FROM AUTHOR]