Founder/Chief Executive Officer Exit: A Social Capital Perspective of New Ventures

Posted: 9 Nov 2009

See all articles by Yvonne L. Hinson

Yvonne L. Hinson

Wake Forest University - Schools of Business

Charles E Bamford

University of Notre Dame

Garry D. Bruton

Texas Christian University - M.J. Neeley School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: 2006

Abstract

Examines the impact of the departure of astartup's corporate executive officer (CEO) on firm performance from a socialcapital perspective.The social capital provided by the CEO can beimmense, especially during the startup phase of the new venture. Data utilized in this study were collected from the Sheshunoff BankSearchDatabase and include 798 banks that were formed between 1996 and 2000 in theUnited States.Results indicate that the departure of a bank's founder/CEOnegatively impacts the bank's performance, as does a repeated exit at the CEOposition.By increasing the size of the top management team, firms canmitigate the performance implications of a CEO's departure. Overall, the results indicate that the social capital perspective isvaluable to exploring the performance impacts of CEO departure in new ventures.Further, this research lends support to the idea that firms can seek ways inwhich to mitigate the impact of CEO departure.Topics for future researchare presented. (SRD)

Keywords: Startups, Founders, Executive succession, Banking industry, Social capital, Firm performance, Chief executive officers (CEOs)

Suggested Citation

Hinson, Yvonne L. and Bamford, Charles E and Bruton, Garry, Founder/Chief Executive Officer Exit: A Social Capital Perspective of New Ventures (2006). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1502019

Yvonne L. Hinson (Contact Author)

Wake Forest University - Schools of Business ( email )

P.O. Box 7659
Winston-Salem, NC 27109-7285
United States
336-758-5113 (Phone)

Charles E Bamford

University of Notre Dame ( email )

Department of Management
Notre Dame, IN 46556-5646
United States

Garry Bruton

Texas Christian University - M.J. Neeley School of Business ( email )

Department of Management
Fort Worth, TX 76129
United States
817-257-7421 (Phone)
817-257-7227 (Fax)

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