Easy cleanups or forbearing improvements: The effect of CEO tenure on successor’s performance

Gonul Colak*, Eva Liljeblom

*Huvudförfattare för detta arbete

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4 Citeringar (Scopus)

Sammanfattning

Long CEO tenure can harm firm performance even after the CEO is replaced. We analyze this issue by conditioning post-turnover firm performance on the length of the preceding CEO’s tenure. Identification comes from instrumenting sudden CEO deaths as an exogenous shock to tenure length. We find that when a successor takes over after a long-tenured CEO, operating performance and stock returns are significantly lower, restructuring costs are higher, “big baths” are larger, and firm recovery is slower. Weaker corporate governance and a long-tenured CEO with lower skills amplify these post-turnover effects.
OriginalspråkEngelska
Artikelnummer101072
Referentgranskad vetenskaplig tidskriftJournal of Financial Stability
Volym63
Antal sidor20
ISSN1572-3089
DOI
StatusPublicerad - 23.09.2022
MoE-publikationstypA1 Originalartikel i en vetenskaplig tidskrift

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