The purpose of this dissertation is to measure the effects of (Chief Executive Officer) CEO succession on corporate financial performance. Using a sample of 83 troubled firms with CEO successions from 1984 to 1999 period, I evaluate the impact of CEO succession on a variety of unadjusted and industry performance matched adjusted financial performance. I find that both unadjusted operating income return on assets (OROA) and industry-adjusted OROA experience a positive improvement one year following CEO succession. In summary, my findings suggest that financial performance is improved following CEO succession in poorly performing firms.; In this study, I find that the insider CEO successors in poorly performing firms are positively associated with post-CEO-succession strategic change in the CEO succession year. Both asset changes and employee changes in the CEO succession year are positively related to insider CEO successors. My results suggest that insider CEO successors are associated with relatively positive financial performance improvement in poorly performing firms. These results, overall, support the theory that insider CEO successions are less disruptive than outsider successions. Based on firm-specific knowledge, better understanding of industry and business environments, support from the board and other senior executives, insider CEO successors have a better chance to improve financial performance in poorly performing firms.; I also find a negative relation between CEO successor age and post-CEO-succession operational performance in one year after CEO succession. The empirical results show a negative relation between the change in board size and post-CEO-succession operational performance in the CEO succession year, which is consistent with the view that smaller boards are more effective overseers of the CEO than larger boards. The results also report a positive relation between the change in board composition and post-CEO-succession operational performance in the CEO succession year.
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