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External management succession, human capital, and firm performance: an integrative analysis

  • Elizabeth E. Bailey

    (Department of Business and Public Policy, 3000 Steinberg Hall-Dietrich Hall, The Wharton School, University of Pennsylvania, Philadelphia, PA 19104-6372, USA)

  • Constance E. Helfat

    (Tuck School of Business, 100 Tuck Hall, Dartmouth College, Hanover, NH 03755, USA)

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    Economic analysis of human capital leads to a somewhat different question than that addressed by other management research on external succession: do differences between external successors in the transferability of their human capital affect firm performance, and if so, how? By comparing external successors that have within-industry and related-industry skills, we find that successors with less transferable (related-industry) skills have greater variance of firm performance. Our analysis provides an example of the benefits of integrating economic concepts with empirical research in competitive strategy, on a topic of central concern in the traditional strategic management literature, namely, top executives. Copyright © 2003 John Wiley & Sons, Ltd.

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    Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

    Volume (Year): 24 (2003)
    Issue (Month): 4 ()
    Pages: 347-369

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    Handle: RePEc:wly:mgtdec:v:24:y:2003:i:4:p:347-369
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    1. Smart, Scott B & Waldfogel, Joel, 1994. "Measuring the Effect of Restructuring on Corporate Performance: The Case of Management Buyouts," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 503-11, August.
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    3. Furtado, Eugene P. H. & Rozeff, Michael S., 1987. "The wealth effects of company initiated management changes," Journal of Financial Economics, Elsevier, vol. 18(1), pages 147-160, March.
    4. Castanias, Richard P. & Helfat, Constance E., 1992. "Managerial and windfall rents in the market for corporate control," Journal of Economic Behavior & Organization, Elsevier, vol. 18(2), pages 153-184, July.
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    6. Pourciau, Susan, 1993. "Earnings management and nonroutine executive changes," Journal of Accounting and Economics, Elsevier, vol. 16(1-3), pages 317-336, April.
    7. Lev, Baruch & Mandelker, Gershon, 1972. "The Microeconomic Consequences of Corporate Mergers," The Journal of Business, University of Chicago Press, vol. 45(1), pages 85-104, January.
    8. Helfat, Constance E & Teece, David J, 1987. "Vertical Integration and Risk Reduction," Journal of Law, Economics and Organization, Oxford University Press, vol. 3(1), pages 47-67, Spring.
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