• The Relationship between Managerial Successions of Family-controlled and Non-family-controlled Businesses and Relative Performances: An Empirical Study of Taiwan Listed Companies

Abstract

This study explores the relationship between CEO turnover and a company’s relative performance and examines whether the board adopts CEO replacement to improve company performance. This study compares family-controlled businesses with non-family-controlled businesses to find out if there a difference in relationship between company performance and CEO turnover. This study also investigates if managing performance of either family-controlled businesses or non-family-controlled businesses improves after going through CEO replacement. This study adopts Logistic regression and t-test to analyze the data. Result shows a strong relationship between accounting based relative performance and CEO turnover. However, CEOs of family-controlled businesses are less likely to be replaced. Also, the performance of non-family-controlled businesses is found progressively improved after going through CEO replacement, whereas such effect is not as significant for family-controlled business.

Keywords: CEO Turnover, Relative Performance Evaluation, Family-controlled Business