The influence of social capital on CEO dismissal in Germany: an empirical analysis

Markus Wrage, Anja Tuschke and Rudi K. F. Bresser

No 2011/5, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: In this study, we address the question of why some CEOs stay in office during a performance downturn while others don't. Based on a social capital perspective we assume that (1) the social capital endowment of an underperforming CEO may reduce the risk of getting dismissed and that (2) the tendency of board members to dismiss the CEO is moderated by their own social capital. Using data of large German corporations, we find support for our assumptions regarding the influence of a CEO's social capital on the risk of getting dismissed. We find partial evidence for a moderating effect of the social capital of board members. Our findings' implications for the literatures on social capital and CEO turnover are discussed. --

Keywords: CEO turnover; board interlocks; social capital (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-eur and nep-soc
Date: 2011
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Persistent link: http://EconPapers.repec.org/RePEc:zbw:fubsbe:20115

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