Management Turnover and Product Market Competition: Empirical Evidence from the U.S. Newspaper Industry

Posted: 6 May 1998

See all articles by Charles J. Hadlock

Charles J. Hadlock

Michigan State University - The Eli Broad College of Business and The Eli Broad Graduate School of Management

C. Edward Fee

Tulane University - A.B. Freeman School of Business

Date Written: June 12, 1997

Abstract

We examine the relationship between management turnover and product market structure in a sample of U.S. newspapers from 50 large cities over the 1950-1993 time period. Examining 6 key managerial positions representing 18,849 observation-years, we find evidence of significantly higher rates of management job turnover in competitive markets compared to monopolistic markets. We find that the sensitivity of turnover probabilities to a newspaper's own performance did not differ significantly between competitive and monopoly markets. Additionally, we find evidence that turnover probabilities increased when a newspaper's competitors exhibited strong performance. Our results are consistent with some theoretical models of the relationship between competition and managerial contracting. In particular, our findings are consistent with the hypothesis that competition generates information that is used by the firm to evaluate its managerial team.

JEL Classification: D21, D40, J44, L20

Suggested Citation

Hadlock, Charles J. and Fee, C. Edward, Management Turnover and Product Market Competition: Empirical Evidence from the U.S. Newspaper Industry (June 12, 1997). Available at SSRN: https://ssrn.com/abstract=41217

Charles J. Hadlock (Contact Author)

Michigan State University - The Eli Broad College of Business and The Eli Broad Graduate School of Management ( email )

315 Eppley Center
East Lansing, MI 48824-1121
United States
517-353-9330 (Phone)
517-432-1080 (Fax)

C. Edward Fee

Tulane University - A.B. Freeman School of Business ( email )

7 McAlister Drive
New Orleans, LA 70118
United States

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