Researcher ORCID Identifier

0009-0006-3010-3977

Graduation Year

2024

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Roberto Pedace

Reader 2

Nicholas Kacher

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Terms of Use for work posted in Scholarship@Claremont.

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© 2023 Jadyn E Lee

Abstract

This study explores executive hiring practices in the largest public and private firms in the United States, specifically focusing on internal promotions, external promotions, internal lateral hiring, and external lateral hiring for CEOs. I aimed to provide insights into the risk thresholds of public and private companies when considering unfamiliar job candidates, particularly those applying for the chief executive position. Understanding how a firm's public or private status influences the likelihood of internal promotions, external promotions, internal lateral hiring, or external lateral hiring can optimize hiring strategies and inform the job market. Recognizing the significant impact of CEO hiring on a firm's long-term value, this paper extends the exploration to broader economic implications, including firm performance and corporate governance incentives. My research examines these factors in order to contribute concise insights to the discourse on executive hiring practices and their implications for organizational and economic structures.

I ran four Firth Logit regressions, each with a different dependent variable pertaining to CEO transition type (i.e., whether the CEO was internally promoted, externally promoted, internally laterally hired, or externally laterally hired). My primary explanatory variable was ownership type (whether the firm was public or private). Despite my regression models demonstrating an overall statistically significant fit to the data, my regression analysis returned insignificant results for the relationship between CEO transition type and ownership type. Most of my other predictor variables did not reach statistical significance, with certain exceptions that require a larger sample size to evaluate in greater depth.

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