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

• 成果类型: Article
• 署名作者: Dasgupta, Sudipto; Li, Xi; Wang, Albert Y.
• 署名单位: Chinese University of Hong Kong; Lancaster University; Centre for Economic Policy Research - UK; University of Arkansas System; University of Arkansas Fayetteville; Auburn University System; Auburn University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhx129
• 发表日期: 2018
• 页码: 4187
• 关键词: CORPORATE GOVERNANCE; incentives; boards

摘要

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.