Robust Models of CEO Turnover: New Evidence on Relative Performance Evaluation

C Edward Fee, Charles J Hadlock, Jing Huang and Joshua R Pierce

The Review of Corporate Finance Studies, 2018, vol. 7, issue 1, 70-100

Abstract: We examine the robustness of empirical models and findings concerning CEO turnover. We show that the sensitivity of turnover to abnormal firm performance is an extremely robust result. In contrast, evidence indicating a relation between turnover and industry performance is both weak and fragile. We show that small changes in turnover modeling choices can affect inferences in a large way. Our evidence casts substantial doubt on the hypothesis that there is a large industry performance component to turnover decisions. We use our findings to offer some general prescriptions for checking robustness results in CEO turnover research.Received June 6, 2017; editorial decision July 10, 2017 by Editor Uday Rajan.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:oup:rcorpf:v:7:y:2018:i:1:p:70-100.

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