Whether CEO Succession Via Hierarchical Jumps is Detrimental or Blessing in Disguise? Evidence from Chinese Listed Firms

Sarfraz Muddassar Zeeshan Fareed Muhammad Ateeq ur Rehman Adnan Maqbool Muhammad Asim Ali Qureshi
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Sarfraz Muddassar Zeeshan Fareed Muhammad Ateeq ur Rehman Adnan Maqbool Muhammad Asim Ali Qureshi: Southwestern University of Finance and Economics, Chengdu, CHINA. Hohai University. Business School, Huzhou University, Huzhou city PR China. Southwestern University of Finance and Economics Khwaja Fareed University of Engineering and Information Technology Department of International Trade, Southwestern University of Finance and Economics

Zagreb International Review of Economics and Business, 2019, vol. 22, issue 2, 23-41

Abstract: This study investigates the impact of hierarchical jumps in the CEO’s succession on firms’ financial performance. To contemplate deeply, hierarchical jumps have been categorized into high and low level evaluating the positive impact of high-level hierarchical jump on firms’ performance. Moreover, this study has also formulated hierarchical intensity signifying the idea that despite neglecting senior board members during hierarchical jumps, still marginal increment in the firms’ growth has been observed. Using panel regression technique along with 2sls instrumental regression, this research reveals that hierarchical jumps in CEOs successions are more conducive only if the incumbent CEOs are selected irrespective of age, degree or high hierarchical position within the hierarchical ladder. Lastly, this study enunciates that firms having high total assets boost their performance via hierarchical jumps emphatically. JEL Classification: G30, G34, G39, L25

Keywords: CEO’s succession; Hierarchical jumps; Firm’s performance; Hierarchical intensity (search for similar items in EconPapers)
Date: 2019
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DOI: 10.2478/zireb-2019-0018

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