Whether CEO Succession Via Hierarchical Jumps is Detrimental or Blessing in Disguise? Evidence from Chinese Listed Firms

Abstract

This study investigates the impact of hierarchical jumps in the CEO’s succession on firms’ financial performance. To contemplate deeply, hierarchical jumps have been categorized into high and low level evaluating the positive impact of high-level hierarchical jump on firms’ performance. Moreover, this study has also formulated hierarchical intensity signifying the idea that despite neglecting senior board members during hierarchical jumps, still marginal increment in the firms’ growth has been observed. Using panel regression technique along with 2sls instrumental regression, this research reveals that hierarchical jumps in CEOs successions are more conducive only if the incumbent CEOs are selected irrespective of age, degree or high hierarchical position within the hierarchical ladder. Lastly, this study enunciates that firms having high total assets boost their performance via hierarchical jumps emphatically.

Demonstrating the interconnection of hierarchical order disturbances in CEO succession with corporate social responsibility and environmental sustainability

“…The hierarchy (Diefenbach & Sillince, 2011) among top management represents the authority of board members (Zhu et al, 2016), even informal type hierarchy accelerates the firm's growth (He & Huang, 2011). A recent study (Shah, Sarfraz, et al, 2019; Shah, Tang, et al, 2019) has examined the negative impact of CEO succession via hierarchical jumps on agency cost while (Sarfraz et al, 2019) concluding the positive impact on innovation but they have neglected the effectiveness of CEO succession via HOD on corporate social responsibility which still requires consolidated exploration. Though it has already been examined that firms' growth is elevated by adopting corporate social responsibilities measures (Harjoto & Jo, 2011; Tang, Hull, & Rothenberg, 2012) but the impact of CEO succession on corporate social responsibility has yet needed comprehensive contemplation.…”

“…Data have been accumulated from CSMAR and WIND 2 sources for the years 2014–2018. Independent variable hierarchical order disturbance in CEO succession has been constructed by analyzing a company's profile following (Zhu et al, 2016; Shah, Sarfraz, et al, 2019; Shah, Tang, et al, 2019; Sarfraz et al, 2019). Moreover, following prior study, an independent variable (CSR ratio) has been constructed (Sial et al, 2018).…”

“…“Dual” represents the successor having both designation (chairman and chief executive both) (Chen, Zhou, & Zhu, 2019). Similarly, “Degree” 3 (Wong & Chen, 2018, Shah, Sarfraz, et al, 2019; Shah, Tang, et al, 2019; Sarfraz, He, Shah, & Fareed, 2020; Sarfraz, Ozturk, Shah, & Maqbool, 2020) and “SOE” have been included in the regression following the prior literature (Sarfraz, He, et al, 2020; Sarfraz, Ozturk, et al, 2020). Lastly, the variable NDIR (number of directors) indicates the board size of the firms.…”

“…Meanwhile, the impact of CEO succession via Hierarchical disturbance on CSR still requires exploration which this study cogitates empirically. Specifically, following (Sarfraz, Qun, Shah, & Fareed, 2019; Shah, Sarfraz, et al, 2019; Shah, Tang, Sarfraz, & Fareed, 2019) hierarchical order disturbance has been constructed. Through analyzing the listed companies' hierarchical order of the board members, it has been signified whether the incumbent CEO has been appointed via hierarchical order disturbance or not?…”

Constructing a Hierarchical Framework for Assessing the Application of Big Data Technology in Entrepreneurship Education

“…Finally, when new technologies, such as big data, are embedded, entrepreneurship education research in the new context lacks a systematic framework. Shah et al (2019) points out that a hierarchy contributes to improving corporate performance and plays a key role in implementing strategies. In addition, hierarchical jumps can improve management efficiency and further promote sustainable development (Sarfraz et al, 2019).…”