Interim CEO and corporate long‐term investment: evidence from China

Fei Wu, Jing Yu, Yujie Zhao and Donghua Zhou

Accounting and Finance, 2022, vol. 62, issue 1, 369-415

Abstract: Building on the short‐term nature of interim CEO contracts, this paper examines the effect of interim CEO appointment on corporate long‐term investment measured by a firm’s R&D spending. We find robust evidence that the corporate R&D investment level is significantly lower during the interim CEO appointment period. The negative association between R&D investments and the interim CEO appointment is most pronounced when interim CEOs exhibit a myopic tendency. The primary findings disappear in the subsample of state‐owned companies, highlighting the bright side of state ownership in ameliorating managerial myopia. Finally, we document that appointing an interim CEO is costly for shareholders in the short run as well as in the long run.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/acfi.12793

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:acctfi:v:62:y:2022:i:1:p:369-415

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0810-5391

Access Statistics for this article

Accounting and Finance is currently edited by Robert Faff

More articles in Accounting and Finance from Accounting and Finance Association of Australia and New Zealand Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().