Performance Changes and Restructuring Activities Following Top Management Turnover of Unsuccessful Acquisitions

We document improvement in operating performance and stock return following the management turnover of firms with declining post-acquisition performance. Performance changes in firms with turnover events are compared to those without them, showing results of betterment in the former group. Outside successors outperform inside successors in the research period following the change. With regard to restructuring activities, firms with management turnover have higher frequencies of these events than those without it. Similarly, the asset sales activities taken up by firms with outside successors also surpass those of inside successors. Finally, the performance of firms with the contingency of both top executive turnover and asset sales improves the most.