IDEAS home Printed from https://ideas.repec.org/a/eee/ecofin/v77y2025ics1062940825000221.html
   My bibliography  Save this article

CEO turnover and financial policy transfer

Author

Listed:
  • Kim, Daniel Sungyeon
  • Ahn, Kwangwon
  • Jang, Hanwool
  • Lee, Jaeyoon

Abstract

We explore how Chief Executive Officer (CEO) turnovers influence firms’ capital structures. Our findings indicate that adjustments in capital structure are markedly more significant when the incoming CEO is sourced from outside the firm, compared to internal promotions. Moreover, firms undergoing CEO turnovers tend to realign their actual leverage to target levels more swiftly than those without such changes, with this process being particularly accelerated when the CEO is externally appointed. A notable insight from our analysis is that external CEOs frequently adopt and apply leverage strategies from their previous positions, transferring financial strategies that reflect their past experiences. These patterns remain robust when we specifically examine forced turnovers, suggesting that the external versus internal nature of succession, rather than the reason for turnover, drives the transfer of financial policies.

Suggested Citation

  • Kim, Daniel Sungyeon & Ahn, Kwangwon & Jang, Hanwool & Lee, Jaeyoon, 2025. "CEO turnover and financial policy transfer," The North American Journal of Economics and Finance, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:ecofin:v:77:y:2025:i:c:s1062940825000221
    DOI: 10.1016/j.najef.2025.102382
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1062940825000221
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.najef.2025.102382?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Capital Structure; CEO turnover; Corporate Policy Transfer; Corporate Governance;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecofin:v:77:y:2025:i:c:s1062940825000221. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620163 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.