The effect of competition on CEO turnover

• 成果类型: Article
• 署名作者: DeFond, ML; Park, CW
• 署名单位: University of Southern California; Hong Kong University of Science & Technology
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/S0165-4101(98)00044-5
• 发表日期: 1999
• 关键词: relative performance evaluation; moral hazard; COMPENSATION

摘要

Relative performance evaluation (RPE) is likely to improve boards of director's ability to identify unfit CEOs, and competition is likely to enhance the usefulness of RPE. Consistent with our hypotheses, the frequency of CEO turnover is greater in highly competitive industries than in less competitive industries. We also find that RPE-based (firm-specific) accounting measures are more closely associated with CEO turnover in high (low) competition industries than in low (high) competition industries. These findings suggest that the lack of support for RPE in prior studies results from not considering the effects of competition. (C) 1999 Elsevier Science B.V. All rights reserved. JEL classification: J33; J41; J63; M4.