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Strategic or status quo-preserving business exit: (how) do CEO turnover and succession matter?

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  • Decker, Carolin
  • Bresser, Rudi K. F.
  • Mellewigt, Thomas

Abstract

Business exit has implications for a firm's corporate strategy. Two types of exit events are distinguished: those that involve strategic change and those that are status quo-preserving. This study investigates the impact of CEO turnover and succession on strategic versus status quo-preserving business exits. Based on a sample of CEO turnover and succession events and subsequent business exits of German corporations from different industries, our results suggest that neither voluntary nor involuntary CEO turnover is relevant to business exit. In contrast, outsider succession significantly affects the likelihood of strategic business exit, while a corporation's performance does not moderate this relationship.

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  • Decker, Carolin & Bresser, Rudi K. F. & Mellewigt, Thomas, 2010. "Strategic or status quo-preserving business exit: (how) do CEO turnover and succession matter?," Discussion Papers 2010/25, Free University Berlin, School of Business & Economics.
    • Handle: RePEc:zbw:fubsbe:201025
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    References listed on IDEAS

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    1. Thomas Mellewigt & Anoop Madhok & Antoinette Weibel, 2007. "Trust and formal contracts in interorganizational relationships - substitutes and complements," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(8), pages 833-847.
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