 CEO turnover and financial policy transferDaniel Sungyeon Kim, Kwangwon Ahn, Hanwool Jang and Jaeyoon Lee The North American Journal of Economics and Finance, 2025, vol. 77, issue C Abstract: We explore how Chief Executive Officer (CEO) turnovers influence firms’ capital structures. Our findings indicate that adjustments in capital structure are markedly more significant when the incoming CEO is sourced from outside the firm, compared to internal promotions. Moreover, firms undergoing CEO turnovers tend to realign their actual leverage to target levels more swiftly than those without such changes, with this process being particularly accelerated when the CEO is externally appointed. A notable insight from our analysis is that external CEOs frequently adopt and apply leverage strategies from their previous positions, transferring financial strategies that reflect their past experiences. These patterns remain robust when we specifically examine forced turnovers, suggesting that the external versus internal nature of succession, rather than the reason for turnover, drives the transfer of financial policies. Keywords: Capital Structure; CEO turnover; Corporate Policy Transfer; Corporate Governance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:77:y:2025:i:c:s1062940825000221 DOI: 10.1016/j.najef.2025.102382 Access Statistics for this article The North American Journal of Economics and Finance is currently edited by Hamid Beladi More articles in The North American Journal of Economics and Finance from Elsevier |
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