The effect of CEO succession on the firm's long-term performance pursuit and the role of CEO legitimacy

Sang Yoon Shin

International Journal of Business Innovation and Research, 2021, vol. 25, issue 2, 145-161

Abstract: This study addresses the effect of CEO succession on R%D expenditure and the moderating role of CEO legitimacy on the relationship. More specifically, the study suggests that CEO succession is negatively associated with R%D expenditure that increases the firm's long-term performance and that new CEO's legitimacy weakens this negative relationship. As hypothesised, the analysis of 130 Korean firms confirms that CEO succession decreases the expenditure. However, among several legitimacy factors, only the new CEO's tenure inside the firm significantly reduced the negative relationship between CEO succession and the expenditure.

Keywords: CEO succession; long-term performance; R%D expenditure; legitimacy; managerial discretion. (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbire:v:25:y:2021:i:2:p:145-161

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