| dc.description.abstract | Using data of private Norwegian family firms in the oil industry, we study
the effect of generational CEO turnovers –between 2000 and 2017– on companies’
financial performance. We analyze firm performance by examining changes in
operating return on assets in the years surrounding the CEO changes. We identify
that, on average, family CEO successions: turn over the company to a younger
generation, happen in smaller firms, and do not occur after a period of declining
performance. More importantly, we find that family firms that undergo a family
CEO succession experience no significant change in financial performance after the
turnover compared to non-family CEO successions. Moreover, when controlling
for firm age, CEO age, and year type, our findings suggest that family firms that
undergo a family CEO succession experience a positive and significant change in
profitability. Finally, given that the oil industry poses great importance to the
Norwegian economy, we conclude that the effects in performance are attributed to
CEOs acting as stewards of their firms and having a pressure to behave and maintain
stable financial performance to contribute to the industry’s wellbeing. | en_US |
