Path analysis on the effect of CEO turnover on enterprise value based on embeddability perspective

Abstract

Social network theory suggests CEO embeds in the internal and external networks of enterprise, and his network embeddability decides the amount of social capital what derived from the network structure, which could become the key to create enterprise value. When CEO turnover occurs, the different internal and external enterprise network embeddability of the original and successor CEO leads to the different the amount of social capital, which leads to the change of enterprises value. Take this theory as basis, the regression analysis with intermediary variables is used to test the logical link among CEO turnover, CEO network embeddability and enterprise value, and test the intermediary effect of CEO network embeddability between CEO turnover and enterprise value. The results of empirical analysis validated that the embeddability is the path of the study on the relationship between CEO turnover and enterprise value..