Journal article
CEO turnover and the firm's investment decisions
This paper examines the relation between management turnover and divestitures of recently acquired divisions. The empirical results indicate that at the time of a management change, there is an increased probability of divesting an acquisition at a loss or one considered unprofitable by the press. The probability increases by about the same amount regardless of whether the change is an apparent age-65 retirement or a resignation.
Overall, the results are consistent with a variety of agency-based theories of corporate investment and suggest that management changes are important events for corporations because they lead to reversals of poor prior decisions.
Language: | English |
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Year: | 1995 |
Pages: | 159-188 |
ISSN: | 18792774 and 0304405x |
Types: | Journal article |
DOI: | 10.1016/0304-405X(94)00793-Z |