This study employs a two-stage least squares (2SLS) regression to investigate the influence of external competition and corporate governance on leadership structure chosen, and further examine the moderating effect of external competition on the relationship between leadership structure and firm performance. This study shows that the choice of leadership structure is endogenously determined. In a rapid growth environment or a great market competition, a firm inclines adopting a dual-leadership structure to adjust to changing environments and enhancing competitiveness. A firm with a large board, high director ownership, high managerial ownership, or high institutional shareholdings favors a non-dual leadership structure to avoid CEO power concentration. Controlling the endogeneity of leadership structure, CEO duality is significantly and negatively related to return on assets and insignificantly related to Tobin’s q. Notably, dual-leadership structure enhances future firm value in a rapid growth/dynamic environment or a great competitive market.