**6. Conclusions**

We revisited a widely studied topic in the literature—the determinants for the likelihood of CEO turnover. To the best of our knowledge, this is the first paper to focus on CEO turnover in Romania using a detailed and comprehensive analysis and considering financial, social, political, and corporate governance determinants, applied to an intricate period of time, with both exceptional development and economic recession.

For the Romanian case, our study took into consideration, for the first time, explanatory variables for the foreign origin of a CEO, CEO gender, and the incidence of political intrusions in corporate decisions in companies with governmental ownership. Thus, the occurrence of CEO turnover was positively correlated with the foreign origin of the manager, supporting the hypothesis that foreign managers experience difficulties in adapting to the Romanian economic environment. The political influence on the CEO turnover decision was revealed when firms had large state ownership. We found evidence that female CEOs were more likely to leave their positions than male CEOs. We also showed that the financial crisis boosted the probability of CEO forced turnover.

We examined, as well, the role of other important corporate governance variables in the CEO turnover process, and the results are mixed. The empirical evidence confirmed that some reforms have been implemented. Two particular entrenchment mechanisms were emphasized, namely, the CEO–Chairman duality and the controlling power of the largest shareholder. Additionally, we emphasized the "voting with their feet" behavior of the institutional investors. The CEO ownership is not significant as an entrenchment mechanism for forced CEO turnovers, but we found some intriguing evidence of its direct relation to the likelihood of voluntary CEO turnover occurrence. Other well-known corporate governance mechanisms, such as the second largest shareholder and the institutional investors' activism, seem ineffective in the sample considered.

As for the relation to several performance indicators, our results were similar to those identified in the previous financial literature for other countries. The CEO turnover decision was strongly and negatively related only to accounting-based performance ratios. Whatever model applied, the market-based performance variables did not have a significant influence, and a possible explanation could relate to the features of the Romanian capital market.

As per many empirical studies, this one has some limitations. The most important limitation concerns the sample, which was relatively small (426 observations, with 58 CEO turnover events) compared to similar studies in this field. This limit can usually be found in empirical studies that

<sup>5</sup> The results are available upon request.

analyze emerging economies, especially those of Eastern and Central Europe. Due to the fact that their capital markets are newly created or recently reopened, in many cases, the whole number of listed companies is small and thus it is not possible to collect data sets as large as those of studies conducted in highly developed countries (Filip and Raffournier 2010). In our study, this criticism should be mitigated, given that the sample includes all of the Romanian listed companies (except the BSE).

Our results can be useful for practitioners, as well as for academics. The conclusions are important for investors, and especially for foreign investors not accustomed to the Romanian economic environment. Additionally, our findings provide a better understanding of the managerial labor market in a transitional Eastern European country and evidence that it is still subject to political interference in corporate decisions of state-owned companies subsequent to a change of the political party in power.

We expect the development of post-communist economies to determine substantial improvements in corporate governance mechanisms and practices, and the CEO turnover phenomenon to follow the trends revealed in the literature for developed countries. It would be interesting for future analysis to mainly capture this evolution for a better understanding of the causes that trigger it.

**Author Contributions:** All authors contributed to the design, introduction, literature review, results, and discussion. The database and methodology section was mostly written by A.C.-S. and R.M. The original draft preparation, the review and editing processes, and the funding acquisition were mostly done by I.-M.D. and A.C.-S. All authors have read and agreed to the published version of the manuscript.

**Funding:** This work was supported by the Center of Financial and Monetary Research (CEFIMO). All opinions expressed are those of the authors and have not been endorsed by CEFIMO.

**Acknowledgments:** The authors would like to express their gratitude to the Bucharest Stock Exchange (BSE) and Tradeville representatives, who provided part of the preliminary database. The results and conclusions of the paper are entirely the authors' responsibility and the BSE cannot be held liable for any of the opinions stated in this research paper. The authors also wish to thank Victor Dragotă, Elena Dumitrescu, Elena ¸Tilică, Radu Ciobanu, the participants of the SSEM-2013 Conference in Famagusta on 10–14 May 2013, the participants of the research seminar of the Center of Financial and Monetary Research (CEFIMO) on 19 June 2013, and participants of the GEBA-2019 Conference in Ias,i for their useful comments. Lastly, the authors also thank the anonymous reviewers for their useful comments and suggestions. The remaining errors are ours.

**Conflicts of Interest:** The authors declare no conflicts of interest. The funders had no role in the design of the study; in the collection, analyses, or interpretation of data; in the writing of the manuscript; to publish the results.
