IDEAS home Printed from https://ideas.repec.org/p/ris/albaec/2011_014.html
   My bibliography  Save this paper

CEO Turnover: More Evidence on the Role of Performance Expectations

Author

Listed:
  • Humphreys, Brad

    (University of Alberta, Department of Economics)

  • Paul, Rodney

    (Syracure University)

  • Weinbach, Andrew

    (Coastal Carolina University)

Abstract

Previous research on CEO turnover indicates that a number of factors, including age, firm performance, and expected firm performance affect CEO turnover. Measurement of expected performance in these studies is typically based on investment analysts’ forecasts of earnings; these expectations potentially suffer from a number of problems, including the tendency for CEOs to “manage” analysts’ expectations. We examine the relationship between performance expectations and CEO turnover using data from NCAA Division I-A college football using a market-determined measure of expected performance, winning percentage against point spreads; this expected performance measure does not suffer from many of the problems that plague analysts’ earnings forecasts. We find that performance expectations, actual expectations, and tenure affect CEO turnover in NCAA Division I-A college football, based on performance data from 102 Division I-A football programs over the period 1980-2004.

Suggested Citation

  • Humphreys, Brad & Paul, Rodney & Weinbach, Andrew, 2011. "CEO Turnover: More Evidence on the Role of Performance Expectations," Working Papers 2011-14, University of Alberta, Department of Economics.
    • Handle: RePEc:ris:albaec:2011_014
    as

    Download full text from publisher

    File URL: https://sites.ualberta.ca/~econwps/2011/wp2011-14.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Paul Holmes, 2011. "Win or Go Home: Why College Football Coaches Get Fired," Journal of Sports Economics, , vol. 12(2), pages 157-178, April.
    2. Rick Audas & John Goddard & W. Glenn Rowe, 2006. "Modelling employment durations of NHL head coaches: turnover and post-succession performance," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 293-306.
    3. Rodney J. Paul & Andrew P. Weinbach, 2009. "Sportsbook Behavior in the NCAA Football Betting Market: Tests of the Traditional and Levitt Models of Sportsbook Behavior," Journal of Prediction Markets, University of Buckingham Press, vol. 3(2), pages 21-37, August.
    4. Shen, Wei & Gentry, Richard J. & Tosi Jr., Henry L., 2010. "The impact of pay on CEO turnover: A test of two perspectives," Journal of Business Research, Elsevier, vol. 63(7), pages 729-734, July.
    5. Raymond D. Sauer, 1998. "The Economics of Wagering Markets," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2021-2064, December.
    6. Rodney J. Paul & Andrew P. Weinbach, 2007. "Does Sportsbook.com Set Pointspreads to Maximize Profits? Tests of the Levitt Model of Sportsbook Behavior," Journal of Prediction Markets, University of Buckingham Press, vol. 1(3), pages 209-218, December.
    7. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    8. Egon Franck & Stephan Nüesch & Jan Pieper, 2010. "How Expectations Affect Managerial Change," Working Papers 0139, University of Zurich, Institute for Strategy and Business Economics (ISU).
    9. Barron, John M. & Chulkov, Dmitriy V. & Waddell, Glen R., 2011. "Top management team turnover, CEO succession type, and strategic change," Journal of Business Research, Elsevier, vol. 64(8), pages 904-910, August.
    10. Powers, Eric A., 2005. "Interpreting logit regressions with interaction terms: an application to the management turnover literature," Journal of Corporate Finance, Elsevier, vol. 11(3), pages 504-522, June.
    11. Audas, Rick & Dobson, Stephen & Goddard, John, 2002. "The impact of managerial change on team performance in professional sports," Journal of Economics and Business, Elsevier, vol. 54(6), pages 633-650.
    12. de Dios Tena, Juan & Forrest, David, 2007. "Within-season dismissal of football coaches: Statistical analysis of causes and consequences," European Journal of Operational Research, Elsevier, vol. 181(1), pages 362-373, August.
    13. Aboody, David & Kasznik, Ron, 2000. "CEO stock option awards and the timing of corporate voluntary disclosures," Journal of Accounting and Economics, Elsevier, vol. 29(1), pages 73-100, February.
    14. Farrell, Kathleen A. & Whidbee, David A., 2003. "Impact of firm performance expectations on CEO turnover and replacement decisions," Journal of Accounting and Economics, Elsevier, vol. 36(1-3), pages 165-196, December.
    15. Brickley, James A., 2003. "Empirical research on CEO turnover and firm-performance: a discussion," Journal of Accounting and Economics, Elsevier, vol. 36(1-3), pages 227-233, December.
    16. Steven D. Levitt, 2004. "Why are gambling markets organised so differently from financial markets?," Economic Journal, Royal Economic Society, vol. 114(495), pages 223-246, April.
    17. Engel, Ellen & Hayes, Rachel M. & Wang, Xue, 2003. "CEO turnover and properties of accounting information," Journal of Accounting and Economics, Elsevier, vol. 36(1-3), pages 197-226, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Janina Kleinknecht & Daniel Würtenberger, 2022. "Information effects of managerial turnover on effort and performance: Evidence from the German Bundesliga," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(3), pages 791-812, April.
    2. Daniel Weimar & Pamela Wicker, 2017. "Moneyball Revisited," Journal of Sports Economics, , vol. 18(2), pages 140-161, February.
    3. Julio del Corral & Andrés Maroto & Andrés Gallardo, 2017. "Are Former Professional Athletes and Native Better Coaches? Evidence From Spanish Basketball," Journal of Sports Economics, , vol. 18(7), pages 698-719, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Humphreys, Brad R. & Paul, Rodney J. & Weinbach, Andrew P., 2016. "Performance expectations and the tenure of head coaches: Evidence from NCAA football," Research in Economics, Elsevier, vol. 70(3), pages 482-492.
    2. Stefano d’Addona & Axel Kind, 2014. "Forced Manager Turnovers in English Soccer Leagues," Journal of Sports Economics, , vol. 15(2), pages 150-179, April.
    3. Humphreys, Brad R. & Paul, Rodney J. & Weinbach, Andrew P., 2013. "Consumption benefits and gambling: Evidence from the NCAA basketball betting market," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 376-386.
    4. Stefano D'Addona & Axel Kind, 2011. "Forced Manager Turnovers In English Soccer Leagues: A Long-Term Perspective," Working Papers 1011, CREI Università degli Studi Roma Tre, revised 2011.
    5. Bushman, Robert & Dai, Zhonglan & Wang, Xue, 2010. "Risk and CEO turnover," Journal of Financial Economics, Elsevier, vol. 96(3), pages 381-398, June.
    6. Lefgren, Lars J. & Platt, Brennan & Price, Joseph & Higbee, Samuel, 2019. "Outcome based accountability: Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 160(C), pages 121-137.
    7. Frick, Bernd & Barros, Carlos Pestana & Prinz, Joachim, 2010. "Analysing head coach dismissals in the German "Bundesliga" with a mixed logit approach," European Journal of Operational Research, Elsevier, vol. 200(1), pages 151-159, January.
    8. Jeremy Sandford & Paul Shea, 2013. "Optimal Setting of Point Spreads," Economica, London School of Economics and Political Science, vol. 80(317), pages 149-170, January.
    9. Daniel M. Chin, 2011. "A Test of Unbiasedness and Sports Book Profits in the NFL Point Spread Betting Merket Using Circadian Advantage," Journal of Gambling Business and Economics, University of Buckingham Press, vol. 5(3), pages 15-26, October.
    10. Raphael Flepp & Stephan Nüesch & Egon Franck, 2016. "Does Bettor Sentiment Affect Bookmaker Pricing?," Journal of Sports Economics, , vol. 17(1), pages 3-11, January.
    11. Babatunde Buraimo & David Peel & Rob Simmons, 2013. "Systematic Positive Expected Returns in the UK Fixed Odds Betting Market: An Analysis of the Fink Tank Predictions," IJFS, MDPI, vol. 1(4), pages 1-15, December.
    12. Erik Snowberg & Justin Wolfers, 2010. "Explaining the Favorite-Long Shot Bias: Is it Risk-Love or Misperceptions?," Journal of Political Economy, University of Chicago Press, vol. 118(4), pages 723-746, August.
    13. Kevin Krieger & Clay Girdner & Andy Fodor & David Kirch, 2013. "The Power Of Wagering On Power Conferences," Journal of Prediction Markets, University of Buckingham Press, vol. 7(1), pages 13-26.
    14. Srivastav, Abhishek & Keasey, Kevin & Mollah, Sabur & Vallascas, Francesco, 2017. "CEO turnover in large banks: Does tail risk matter?," Journal of Accounting and Economics, Elsevier, vol. 64(1), pages 37-55.
    15. Rodney J Paul & Andrew Weinbach, 2012. "Wagering Preferences Of Nfl Bettors: Determinants Of Betting Volume," Journal of Prediction Markets, University of Buckingham Press, vol. 6(1), pages 42-55.
    16. Carlos Gomez-Gonzalez & Julio del Corral, 2018. "The betting market over time: overround and surebets in European football," Economics and Business Letters, Oviedo University Press, vol. 7(4), pages 129-136.
    17. Rodney J. Paul & Andrew P. Weinbach, 2014. "Market Efficiency and Behavioral Biases in the WNBA Betting Market," IJFS, MDPI, vol. 2(2), pages 1-10, April.
    18. Rodney Paul & Andrew P. Weinbach & Kenneth Small, 2014. "The Relationship between Sportsbook Volume, Forecast Accuracy, and Market Efficiency: The NFL and NCAA Football," Journal of Prediction Markets, University of Buckingham Press, vol. 8(2), pages 29-42.
    19. Yvon Rocaboy & Marek Pavlik, 2020. "Performance Expectations of Professional Sport Teams and In-Season Head Coach Dismissals—Evidence from the English and French Men’s Football First Divisions," Economies, MDPI, vol. 8(4), pages 1-20, October.
    20. Jarva, Henry & Kallunki, Juha-Pekka & Livne, Gilad, 2019. "Earnings performance measures and CEO turnover: Street versus GAAP earnings," Journal of Corporate Finance, Elsevier, vol. 56(C), pages 249-266.

    More about this item

    Keywords

    CEO turnover; performance expectations; betting markets;
    All these keywords.

    JEL classification:

    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ris:albaec:2011_014. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Joseph Marchand (email available below). General contact details of provider: https://edirc.repec.org/data/deualca.html .

    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.