Abstract
This study investigates the impacts of CEO succession on Chinese corporate innovation. Using the panel data of Chinese listed firms from 2009 to 2017, we find that CEO succession leads to a decrease in innovation. The main results support the underlying mechanism, that is, the successors are more likely to concern about their future careers, behave myopically and prefer “easy money” rather than long-term investment projects. Moreover, this study contextualizes the different effects of three types of CEO succession on corporate innovation including reason, origin and power. Further, we conduct a rich set of robust tests to eliminate the concerns about the competitive hypotheses especially endogenous problems.
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