Managers with and without Style: Evidence Using Exogenous Variation
In a large panel of Compustat firms, we find that firm policy changes after exogenous CEO departures do not display abnormally high levels of variability, casting doubt on the presence of idiosyncratic-style effects in policy choices. After endogenous CEO departures, we do detect abnormally large policy changes. These changes are larger when the firm is likely to draw from a deeper pool of replacement CEO candidates, suggesting the presence of causal-style effects that are anticipated by the board. Our evidence suggests that managerial styles are not transferred across employers and that standard F-tests are inappropriate for identifying style effects. The Author 2013. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com., Oxford University Press.
Year of publication: |
2013
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Authors: | Fee, C. Edward ; Hadlock, Charles J. ; Pierce, Joshua R. |
Published in: |
Review of Financial Studies. - Society for Financial Studies - SFS. - Vol. 26.2013, 3, p. 567-601
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Publisher: |
Society for Financial Studies - SFS |
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