CEO Succession and Firm Operating Performance: Do Changes in the CEO Successor's Attributes Matter? Evidence from Emerging Markets

This study comprehensively examines the impact of Chief Executive Officer (CEO) succession, along with the changes in CEO successor attributes, on the firm's post-succession operating performance. Based on examining a sample of 1,729 firms listed in emerging markets, we first explore the attributes of the newly appointed CEOs by examining the changes and directions of changes in each of the CEO successors' attributes. Then, employing a series of fixed-effects regression analyses, this study investigates the impact of CEO succession and compares the impact of each direction of change in CEO successor attributes on the post-succession operating performance. Interestingly, we find that hiring an insider, same gender, younger, or with higher social networks as a CEO successor significantly decreases the negative impact of CEO succession on the firm's post-succession operating performance. Hiring an outsider CEO successor, of a different gender, older, less educated, less experienced, or with fewer social networks, significantly amplifies the negative impact of CEO succession on the firm's operating performance.