Change and Firm Performance in Large Corporations: Succession
Effects and Manager Effects
P. Beatty and Edward
J. Zajac, Strategic Management Journal, Vol.
argues that the succession/performance relationship is a function
of two distinct, complementary concepts: manager effects and
succession effects. Hypotheses are tested using a
cross-sectional/longitudinal research design, with a sample
of 209 large corporations. The results suggest that announcements
of CEO changes are typically associated with a reduction in
the value of the firm, as reflected in the perceptions of
the stock market, and that CEO successors tend to significantly
influence the production and investment decisions of their
firms. These results hold for both insider and outsider succession.
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