Search

In this study, we examine new CEOs' social influence behaviors in leadership transition periods. Taking charge is challenging for new CEOs, particularly when (a) predecessor CEOs stay on as board chairs, or (b) the stock market reacts negatively to new CEO appointments. We propose that new CEOs' social influence behaviors may alter the adverse impacts of these factors on their early survival prospects. We examine two types of social influence behaviors displayed by new CEOs: (1) ingratiation toward predecessor CEOs and (2) self-promotion. We create proxies for such behaviors using a computer-aided content analysis of transcripts of new CEOs' conference calls with securities analysts. We find that ingratiation toward predecessors reduces the adverse impact of predecessors' remaining as board chairs while self-promotion mitigates the negative impact of negative stock market reactions. However, we also find evidence demonstrating that new CEOs' social influence behaviors can backfire. Accordingly, our study makes important contributions to both the CEO succession literature and the social influence literature. [ABSTRACT FROM AUTHOR]

Research Summary: Previous studies on initial public offerings (IPOs) in mature stock markets have documented that high‐reputation underwriters primarily work with high‐quality firms and vice versa—that is, they are paired through a quality‐matching mechanism. We propose that in a nascent stock market, a pricing mechanism may also play a role, through which pricing (the underwriting fee) sets the pairing. We examine these two mechanisms in the context of China's ChiNext stock exchange, which was launched in 2009 and experienced dramatic regulatory improvements in 2012–2013. With data on IPOs in 2009–2017, we find evidence to support the pricing mechanism's effect before the regulatory improvements and the quality‐matching mechanism's effect after the improvements. We contribute to the literature by developing an evolutionary view on the pairing mechanisms between important capital market participants. Managerial Summary: In a mature stock market, underwriter reputation signals the underlying quality of initial public offering (IPO) firms to external investors because high‐reputation underwriters primarily work with high‐quality IPO firms and vice versa. We find that in a nascent stock market before the market experiences regulatory improvements, underwriters and IPO firms are paired through a pricing mechanism. That is, underwriters with higher reputation charge higher underwriting fees, and IPO firms with lower quality pay higher fees. Since the pricing mechanism rather than the quality‐matching mechanism sets the pairing, underwriter reputation does not have a signaling effect. Instead, we find that higher underwriting fees signal lower quality of IPO firms. Our findings shed important insights on how market participants are paired in other nascent markets, nascent technology fields and industries. [ABSTRACT FROM AUTHOR]

Research summary: We build upon recent theories and studies about relational self to explain how a CEO's uncommon name may be related to a firm's strategic distinctiveness. Our theory explains why CEOs with uncommon names tend to develop a conception of being different from peers and accordingly pursue strategies that deviate from industry norms. We further suggest that the positive relationship between CEO name uncommonness and strategic distinctiveness is strengthened by the CEO's confidence, power, and environmental munificence. Using name commonness data from the U.S. Social Security Administration and financial data of 1,172 public firms over a 19‐year period, we find support for our theoretical predictions. Managerial summary: Using 19 years of data on 1,172 public firms, we show that firms' distinctive strategies are systematically linked to their CEOs' uncommon names. Psychological studies suggest that individuals with uncommon names tend to have a self‐conception of being different from their peers. Although many people may not have the confidence to exhibit how unique they believe themselves to be, CEOs do—they are generally confident individuals. It is thus predicted that CEOs with more uncommon names tend to pursue strategies that deviate more from their peer firms'. This pattern is even clearer when CEOs have a higher level of confidence, possess greater power, and operate businesses in an environment with more growth opportunities. Looking for unconventional leaders? You can often tell by their names. [ABSTRACT FROM AUTHOR]