CEO Succession and New-Firm Performance: Does Successor Origin Matter?

This study explores the impact of chief executive officer (CEO) succession on new-firm performance, using a sample of Japanese firms founded during the period 2003–2010. When controlling for firm- and CEO-specific characteristics, we find that new firms with experience in CEO succession are more likely to increase sales than those without it. The results also reveal that CEO succession influences sales growth among new firms, but not employment growth. Moreover, based on successor origin, we classify the types of CEO succession, such as inside, outside, and family succession. The results reveal that both insider and outsider succession influences sales growth, while family succession does not.