1-s2.0-S1572308922000936-main.pdf (849.77 kB)
Easy cleanups or forbearing improvements: the effect of CEO tenure on successor's performance
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.
History
Publication status
- Published
File Version
- Published version
Journal
Journal of Financial StabilityISSN
1572-3089Publisher
Elsevier BVExternal DOI
Volume
63Page range
a101072 1-20Department affiliated with
- Accounting and Finance Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2022-11-21First Open Access (FOA) Date
2022-11-21First Compliant Deposit (FCD) Date
2022-11-21Usage metrics
Categories
No categories selectedLicence
Exports
RefWorks
BibTeX
Ref. manager
Endnote
DataCite
NLM
DC