Download This PaperYoung Firm Manager Turnover and Performance
64 Pages Posted: 29 May 2019 Last revised: 15 Jan 2026
Date Written: August 31, 2019
Abstract
This paper investigates the impact of senior manager turnover on the performance of startup firms. Using a novel manager-shareholder matched dataset of young firms in the UK, I exploit shocks to managers’ outside options induced by an area-based policy in support of local businesses. For identification, I compare firms with different ex-ante manager departure likelihoods and different distances to policy regions. I find that senior manager departure has a significant negative impact on young firm performance, suggesting substantial replacement frictions in replacing important managerial human capital. Tentative evidence suggests founder-manager’s private benefit of control and “tight link” with their ventures.
Keywords: New firms, Startup, Senior manager, Founder, Growth, Local policy
JEL Classification: M13; M12; L25; R11
Suggested Citation: Suggested Citation
Su Wang (Contact Author)
ShanghaiTech University, School of Entrepreneurship and Management ( email )
393 Middle Huaxia Road, Pudong
Shanghai, 201210
China