Firm Performance and Managerial Turnover:The Case of Ukraine

The paper studies whether and how CEO turnover in Ukrainian firms is related to theirperformance. Based on a novel dataset covering Ukrainian joint stock companies in 2002-2006, the paper finds statistically significant negative association between the pastperformance of firms measured by return on sales and return on assets, and the likelihood ofmanagerial turnover. While the strength of the turnover-performance relationship does notseem to depend on factors such as managerial ownership and supervisory board size, we dofind significant entrenchments effects associated with ownership by managers. Overall, ouranalysis suggests that corporate governance in Ukraine operates with a certain degree ofefficiency, despite the well-known lacunas in the country’s institutional environment....