Effects of CEO Turnover in Banks: Evidence Using Exogenous Turnovers in Indian Banks

Subramanian, K and Tantri, P L and Sarkar, A (2016) Effects of CEO Turnover in Banks: Evidence Using Exogenous Turnovers in Indian Banks. Working Paper. Indian School of Business. (Unpublished)

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We examine the effects of CEO turnover in banks. Incoming bank CEOs face problems from information asymmetry because banks' operations are opaque and bank risk can change dramatically in a short time. Incoming bank CEOs may, therefore, change bank policies to manage their personal risks. Since CEO turnover is usually endogenous, we utilize a setting where CEO turnover is based solely on retirement age and is thus exogenous to bank performance. Consistent with our thesis, incoming CEOs increase provisioning for future delinquencies and shrink lending. Bank stock prices decline following these changes. Politically motivated lending or ever-greening cannot explain our results.

Affiliation: Indian School of Business
ISB Creiators:
ISB Creators
Subramanian, K
Tantri, P L
Sarkar, A
Item Type: Monograph (Working Paper)
Uncontrolled Keywords: Banks, CEO, CEO turnover, Earnings Management, Financial Crisis, Lending, Loans, Retirement, Superannuation, Tenure
Subjects: Finance
Depositing User: Ilayaraja M
Date Deposited: 08 Jun 2019 19:41
Last Modified: 09 Jun 2019 19:15
URI: http://eprints.exchange.isb.edu/id/eprint/1046
Publisher URL: http://dx.doi.org/10.2139/ssrn.2730495
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