Does Manager Turnover Improve Firm Performance? Evidence from Dutch Soccer, 1986–2004

Abstract

This research examines the impact of manager turnover on firm performance using information from the Dutch soccer league in the period 1986-2004. The main advantage of using sports data is that both manager characteristics and decisions and firm outcomes are directly observable. Both difference-in-difference and 2SLS estimates suggest no statistically significant improvements in performance after manager turnover, whereas previous research based on publicly traded firm data has found positive but very small effects of manager turnover on performance. The estimates confirm previous research using soccer data. In addition, estimates suggest that manager quality does not seem to matter in predicting turnover. These estimates are compared and contrasted with studies using publicly traded firm data and studies using soccer data.

In‐season Head‐coach Dismissals and the Performance of Professional Football Teams

“…According to Pieper, Nüesch, and Franck (2014), some analogies between headcoaches and top managers are notable. In addition to the high frequency of head-coach replacements, examination of football data is attractive for other reasons as well (Ter Weel 2011). As shown in Table 1, in-season changes of head-coaches frequently occur in European football.…”

“…Therefore, as we will describe in more detail below, football data have been used frequently to study the determinants and the effects of management changes. In addition to the high frequency of head-coach replacements, examination of football data is attractive for other reasons as well (Ter Weel 2011). Match results are straightforward, unlike financial statements.…”

In-Season Head-Coach Dismissals and the Performance of Professional Football Teams

“…A number of reasons make the examination of football data attractive (Ter Weel (2011)). First, match results are straightforward, unlike financial statements.…”

Managerial succession and organizational performance-evidence from the German Soccer League

“…The common notion that managers are replaced when organizations exhibit poor performance has been confirmed in previous studies which find that management turn‐over is often preceded by bad organizational performance (Warner et al ., 1988; Denis et al ., 1997; Parrino, 1997). The post‐replacement effect of management turn‐over (succession effect) on organizational performance is an equally well‐researched topic; however, results are mixed (see Thomas (1988) or Giambatista et al . (2005) for reviews).…”