Should a firm favor insiders (handicap outsiders) when selecting a CEO? One reason to do so is to take advantage of the contest to become CEO as a device for providing current incentives to employees. An important reason not to do so is that this can reduce the ability of future CEOs and, hence,...

We argue that outsiders are handicapped in CEO successions to strengthen the incentive that the contest to become CEO provides inside candidates. Handicapping implies that a firm is more likely to pick an insider for the CEO position where insiders are more comparable to each other and less...

Firms tend to promote insiders to the CEO position rather than to hire outsiders. This paper explains this phenomenon by developing a framework in which firms value the incentive that the contest to become CEO provides to current employees, but also want the most able candidate (insider or...

Using a data set containing more than 1,000 observations on CEO succession in large U.S. firms over the period 1974-1995, we examine empirically the choice between insiders and outsiders as CEO. We employ a theoretical framework in which firms value both the incentive that the contest to become...

The paper differs from current literature by providing a systematic analysis of the relationship between sovereign debt, financial distress and political career concerns via a novel game-theoretic model, in order to analyze the strategic behavior of governments in revealing financial distress...