Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/253827 
Year of Publication: 
2021
Citation: 
[Journal:] Journal of Economics, Finance and Administrative Science [ISSN:] 2218-0648 [Volume:] 26 [Issue:] 52 [Publisher:] Emerald Publishing Limited [Place:] Bingley [Year:] 2021 [Pages:] 333-357
Publisher: 
Emerald Publishing Limited, Bingley
Abstract: 
Purpose - This paper investigates how past performance changes, prior CEO replacements and changes in the chairperson impact CEO turnover in public and large private businesses. Design/methodology/approach - We analyze 1,679 CEO replacements documented in a sample of 1,493 Spanish public and private firms during 1998-2004 by computing dynamic binary choice models that control for endogeneity in CEO turnovers. Findings - The results reveal that different performance horizons (short- and long-term) explain the dissimilar rate of CEO turnover between public and private firms. Private firms exercise monitoring patience and path dependency characterizes the evaluation of CEOs, while public companies' short-termism leads to higher CEO turnover rates as a reaction to poor short-term economic results, and alternative controls-ownership and changes in the chairperson-improve the monitoring of management. Originality/value - Our results show the importance of controlling for path dependency to examine more accurately top executives' performance. The findings confirm that exposure to market controls affects the functioning of internal controls in evaluating CEOs and shows a short-term performance horizon that could be behind the recent moves of public firms going private or restraining shareholders' power.
Subjects: 
CEO turnover
Dynamic binary choice models
Path dependency
Private firms
Public firms
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

Files in This Item:
File
Size
222.99 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.