Date of Award

Spring 1-1-2018

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

First Advisor

Yonca Ertimur

Second Advisor

Steve Rock

Third Advisor

Sarah Zechman

Fourth Advisor

Alan Jagolinzer

Fifth Advisor

Frances Tice

Abstract

I examine the market perception of different types of interim CEO successions and whether market expectations are in line with CEO behavior. Using a hand-collected dataset, I find that there are two types of interim CEOs: aspiring and place-holding. I find that the market perceives the appointment of place-holding interim CEOs as bad news and the appointment of aspiring interim CEOs as similar to the appointment of permanent CEOs. I further study actions taken by interim CEOs and do not find evidence that aspiring interim CEOs act myopically. Rather they appear to invest more in discretionary expenses, such as research and development, which suggests that they focus on increasing long-term shareholder value. Thus, market expectations of aspiring interim CEOs are in line with CEO behavior. In addition, analysis of CEO effort suggests that place-holding interim CEOs exert less effort than permanent CEOs. I find preliminary evidence that they issue less accurate forecasts. Overall, this paper provides initial evidence consistent with career concerns of interim CEOs resulting in different CEO behavior.

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