Title: The effect of CEO succession on the firm's long-term performance pursuit and the role of CEO legitimacy
Authors: Sang Yoon Shin
Addresses: Department of Entrepreneurship and Small Business, College of Business Administration, Soongsil University, Sangdo-Ro 369, Dongjak-Gu, Seoul 06978, South Korea
Abstract: This study addresses the effect of CEO succession on R&D expenditure and the moderating role of CEO legitimacy on the relationship. More specifically, the study suggests that CEO succession is negatively associated with R&D expenditure that increases the firm's long-term performance and that new CEO's legitimacy weakens this negative relationship. As hypothesised, the analysis of 130 Korean firms confirms that CEO succession decreases the expenditure. However, among several legitimacy factors, only the new CEO's tenure inside the firm significantly reduced the negative relationship between CEO succession and the expenditure.
Keywords: CEO succession; long-term performance; R&D expenditure; legitimacy; managerial discretion.
International Journal of Business Innovation and Research, 2021 Vol.25 No.2, pp.145 - 161
Received: 08 May 2019
Accepted: 05 Aug 2019
Published online: 27 May 2021 *