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In a relay CEO succession, the heir apparent may exit from the firm when the incumbent CEO are reluctant to relinquish power as initially planned, causing crisis to the firm. This study examines how the personal attributes of the heir and the incumbent can jointly influence the outcome of a relay CEO succession. Specifically, we propose that heir extraversion increases the likelihood of heir promotion by influencing the way an heir is liked and evaluated, especially when the incumbent is also high in extraversion, which can trigger similarity-based interpersonal attraction, thus magnifying the effect of heir extraversion. We further suggest that such a similarity in extraversion plays a more salient role when the incumbent and the heir are demographically different, indicating that personality similarity can to some degree compensate for the lack of demographic similarity in generating mutual like. Our empirical results based on 363 incumbent-heir dyads from publicly listed S&P 1500 companies between 2002 and 2015 provide support for the theoretical arguments. [ABSTRACT FROM AUTHOR]

This study examines how the personality trait of the target firm's CEO influences the acquisition completion likelihood and duration. Using a sample of 621 acquisitions undertaken between U.S. public firms, we find an acquisition involving an extravert target CEO is less likely to consummate and takes more time to complete. Further, we suggest that such effect is contingent on target CEOs' anticipated retirement because retiring extraverted target CEOs tend to suffer less from losses caused by the acquisition. In addition, prior shareholding ties can foster familiarity and trust, which mitigate extraverted target CEOs' resistance, while the tight integration following related acquisitions could make them feel more threatened by being taken over. Our theory and findings provide a novel explanation of difficulties in completing an acquisition and enrich research on the behavioral aspects of acquisitions. [ABSTRACT FROM AUTHOR]

Unrelated diversifications are generally more viable in underdeveloped institutional environments because internal markets within the diversified firm can substitute the inefficient external ones. Using a sample of 498 major acquisitions undertaken during an acquisition wave by Chinese listed firms, we find acquiring a target firm in an entirely different industry can cause more severe goodwill impairment losses in the following two to four years, which indicates that acquirer managers tend to overestimate the synergistic gains they could realize in unrelated diversifications. Moreover, a capable board of directors can provide information advantages through outside directorship ties, structural hole position in the interlock network, and specialized committees, thus limit managers to make value-destroying diversification decisions. Further analysis suggests investors tend to prefer such unrelated acquisitions during the acquisition wave, indicating that shareholder expectations drive managers to diversify. By examining the role of boards as information conduits and advice-providers in limiting the cost of diversification in an underdeveloped institutional environment, this study contributes to the literature on diversification, acquisition and corporate governance. [ABSTRACT FROM AUTHOR]