Product Market Competition Shocks, Firm Performance, and Forced CEO Turnover

Dasgupta, Sudipto and Li, Xi and Wang, Albert (2018) Product Market Competition Shocks, Firm Performance, and Forced CEO Turnover. Review of Financial Studies, 31 (11). pp. 4187-4231. ISSN 0893-9454

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Abstract

We examine the effect of competition shocks induced by major industry-level tariff cuts on forced CEO turnover. Both the likelihood of forced CEO turnover and its sensitivity to performance increase. These effects are stronger for firms exposed to greater predation risk and with products more similar to those of other firms. CEOs are more likely to be forced out in weak governance firms; however, in good governance firms, CEOs are offered higher incentive pay. New outside CEOs receive higher incentive pay and come from firms with lower cost structures and higher asset sales. Performance and productivity improve after forced turnover.

Item Type: Journal Article
Journal or Publication Title: Review of Financial Studies
Additional Information: This is a pre-copy-editing, author-produced PDF of an article accepted for publication in The Review of Financial Studies following peer review. The definitive publisher-authenticated version Sudipto Dasgupta, Xi Li, Albert Y Wang; Product Market Competition Shocks, Firm Performance, and Forced CEO Turnover, The Review of Financial Studies, Volume 31, Issue 11, 1 November 2018, Pages 4187–4231, https://doi.org/10.1093/rfs/hhx129 is available online at: https://academic.oup.com/rfs/article/31/11/4187/4708265
Uncontrolled Keywords: /dk/atira/pure/subjectarea/asjc/1400/1402
Subjects:
Departments: Lancaster University Management School > Accounting & Finance
ID Code: 127997
Deposited By: ep_importer_pure
Deposited On: 06 Nov 2018 13:34
Refereed?: Yes
Published?: Published
Last Modified: 07 Dec 2019 04:55
URI: https://eprints.lancs.ac.uk/id/eprint/127997

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