Document Type

Article

Publication Date

12-2014

Publication Title

Journal of Applied Business Research

Volume

30

Issue

6

First Page

1605

Last Page

1614

Keywords

CEO Gender, CEO Background, Performance, Probability of Bankruptcy

Abstract

The purpose of this paper is to examine, within a succession framework, the impact of the change in CEO gender from female to male on firm performance and probability of bankruptcy. We also examine the impact of change in CEO functional and educational background on firm performance and probability of bankruptcy. We use paired sample t-tests and ordinary least squares regression analysis on 46 CEO successions where the outgoing CEO is a female and the incoming CEO is a male. The results show that a change in CEO gender from female to male is associated with an increase in firm performance and a decrease in the firm probability of bankruptcy. Furthermore, the percentage change in firm performance is negatively related to the change in CEO functional and educational background. The percentage change in firm probability of bankruptcy is positively related to the change in CEO functional and educational background. Firm management and board of directors should be aware that there is such a thing as too much change around a succession event and that it has an adverse effect on firm performance and probability of bankruptcy.

Comments

First published in the Journal of Applied Business Research under a Creative Commons Attribution License (CC-BY).

http://cluteinstitute.com/ojs/index.php/JABR/article/view/8878

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