Insider vs. outsider CEO and firm performance: Evidence from the Covid-19 pandemic

Md Reiazul Haque, Bobae Choi, Doowon Lee and Sue Wright

Finance Research Letters, 2022, vol. 47, issue PA

Abstract: We examine the connection between firm performance and a CEO's previous position (inside or outside the firm), using Covid-19 as an exogenous shock. Firms led by insider CEOs outperformed those led by outsider CEOs in terms of return on assets during the Covid-19 crisis period in 2020, but there was no performance differential in the period before the crisis. Additional tests indicate that outperformance under insider CEOs is observed in firms holding more cash and firms with a higher proportion of internally promoted non-CEO executives. These findings have important implications for boards of directors making CEO appointments.

Keywords: Insider CEO; Outsider CEO; Firm performance; Covid-19 (search for similar items in EconPapers)
JEL-codes: B26 G30 G34 J24 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:47:y:2022:i:pa:s154461232100547x

DOI: 10.1016/j.frl.2021.102609

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