NEW CEO APPOINTMENT AND ITS INFLUENCE ON FOREIGN MARKET RE-ENTRY DECISIONS

Abstract

This dissertation investigates the effect of new CEO appointment on foreign markets re-entry decisions given that new CEOs are likely to bring a new set of skills and knowledge to their firms, leading these firms to evaluate opportunities in foreign markets in a different way. To examine this relationship, data for exit and re-entry events were collected by relying on RavenPack analytics tool. Specifically, data of 294 exit and 144 re-entry events for 339 firms in BRIC economies (i.e., Brazil, Russia, India, and China) were used and supplemented by Compustat data and additional data sources. Conditional Fixed Effect Logit Regressions were used to test the hypotheses. Findings show that new outsider CEOs with strong present focus are less likely to return to foreign markets. However, the experience of newly appointed CEOs matters when the decision to re-enter foreign markets is evaluated, such that new outsider CEOs with prior international experience are more likely to make the decision to return to foreign markets. Those CEOs are also likely to utilize the power that CEO duality holds to push for such a decision. Finally, young new insider CEOs are more likely to re-enter foreign markets. Implications and future directions are also discussed.