1 CEO Turnover and Divisional Investment ( Dissertation Proposal )
نویسنده
چکیده
In this paper we look at the effect of CEO turnover on the divisional investment of multi-divisional firms. We predict that after CEO turnover, new CEOs will use different divisional investment policy and internal capital allocation to realize strategy reorientation, improve firm performance or make more entrenchment. Furthermore, by looking at new CEO’s divisional preference at preand post-turnover period we try to investigate possible difference in the change of investment among divisions according to different extend of information asymmetry and incentive problems. We argue that specific relationship between a division and a new CEO plays an important role after the CEO turnover in determining the adjustment to previous divisional investment distortions.
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