Product market competition shocks, firm performance, and forced CEO turnover
We examine the effect of competition shocks induced by major industry-level tariff cuts on forced CEO turnover. Both the likelihood of forced CEO turnover and its sensitivity to performance increase. These effects are stronger for firms exposed to greater predation risk and with products more simila...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Oxford University Press
2018
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| Online Access: | View Fulltext in Publisher |
| Summary: | We examine the effect of competition shocks induced by major industry-level tariff cuts on forced CEO turnover. Both the likelihood of forced CEO turnover and its sensitivity to performance increase. These effects are stronger for firms exposed to greater predation risk and with products more similar to those of other firms. CEOs are more likely to be forced out in weak governance firms; however, in good governance firms, CEOs are offered higher incentive pay. New outside CEOs receive higher incentive pay and come from firms with lower cost structures and higher asset sales. Performance and productivity improve after forced turnover. © The Author 2017. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. |
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| ISBN: | 08939454 (ISSN) |
| DOI: | 10.1093/rfs/hhx129 |