| By: |
Raphael Flepp (Department of Business Administration, University of Zurich);
Egon Franck (Department of Business Administration, University of Zurich) |
| Abstract: |
In this paper, we account for boards’ misperceptions when replacing a top
manager by differentiating between managerial turnovers following actual poor
performance and managerial turnovers following seemingly poor performance due
to bad luck in order to investigate their subsequent effects on performance.
We focus on managerial changes within football organizations and analyze
dismissals from the top European leagues. To account for the mean reversion of
performance, we create a control group of non-dismissals using the nearest
neighbor approach. To account for boards’ misperceptions, we differentiate
between dismissals and non-dismissals that occur either due to poor playing
performance on the pitch or due to a sequence of bad luck, which is measured
using "expected goals". We find that dismissals after poor playing performance
on the pitch increase subsequent performance, while dis-missals after a series
of bad luck do not. Our results have important implications regarding the
design of future turnover studies and the costs of boards’ ineffective
turnover decisions. |
| Keywords: |
football, managerial turnover, performance, football |
| JEL: |
J44 L83 |
| Date: |
2019–01 |
| URL: |
http://d.repec.org/n?u=RePEc:zrh:wpaper:380&r=all |