RT Journal Article
SR Electronic
T1 Strategic Responses to an Environmental Jolt
JF The Journal of Private Equity
FD Institutional Investor Journals
SP 63
OP 69
DO 10.3905/jpe.2004.450953
VO 8
IS 1
A1 Daniel P. Forbes
A1 Shalini Manrakhan
A1 Sanjay Banerjee
YR 2004
UL https://pm-research.com/content/8/1/63.abstract
AB We develop a model that predicts the likelihood that publicly-traded start-up firms will respond to a sudden drop in environmental munificence by replacing their CEO. The model proposes that CEOs who were founders, those who had prior experience as CEOs, and those who also held the position of board chair will be less likely to be replaced. We base these predictions on a set of knowledge-based and political considerations. We test the model on a sample of 127 Internet IPOs during the period following the dramatic devaluation of Internet stocks that occurred in Spring/Summer 2000. Results support all three hypotheses.