Doctoral thesis: Founder post-merger positioning and CEO selection affect firm performance

In her thesis, “Essays on Corporate Finance and Governance” Yamin Xie presents three essays on corporate finance and governance. The three essays present perspectives on linkages between entrepreneurial finance and mergers and acquisitions, between financial performance and family vs private ownership, agency problem, and the financial effects of CEO selection.
 
- The transition of founders from owners to agents when founders remain in the firm post-merger has practical implications for acquirers. For example, remaining founders positively influence acquirers’ Tobin’s q and stock returns, Yamin Xie points out.
 
Xie also studies takeover premiums and acquirers’ return in acquisitions of private founder-controlled firms. Previous studies claim that private premiums on returns may be attributed to private discounts in price. Xie, however, shows that a private founder price premium and private founder return premium coexist. Family ownership also has an effect.
 
- Private family firms receive a higher acquisition price than private non-family controlled firms. Active founders prior to acquisitions increase the deal price, Xie states.
 
These two first essays have practical economic implications for acquiring firms, founder-controlled firms, venture capital or private equity partners as well as for academics.
 
Xie’s third essay provides a financial perspective for CEO selection and finds that internal COOs are most likely to be promoted CEO due to higher relative firm performance.

- Underperforming CEOs may be replaced with other executives in order to maximize shareholder value. Promoting an internal COO to CEO can have several positive financial effects on for example ROA and stock return, Xie finds.

This third essay has implications for the design of executive promotion, CEO selection, and governance mechanism.
 
M.Sc. Yamin Xie defends her doctoral thesis in Finance: “Essays on Corporate Finance and Governance” Monday, 16 May 2016.
 
Date and Time: 16.5.2016, at 12
Location: Futurum, Hanken School of Economics, Helsinki.
Opponent: Professor Mervi Niskanen, University of Eastern Finland
Custos: Professor Anders Löflund, Hanken School of Economics 
  
A copy of the thesis can be downloaded via this link:  
 http://hdl.handle.net/10138/161472
 
For more information:
Yamin Xie
E-mail: yamin.xie@hanken.fi