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This study explored the impact of CEO turnover during the term of office on public institutions’ performance. We examined the unique situation of South Korea – using an exogenously generated remaining term of office due to former President Park Geun-hye’s impeachment in 2017 as an instrumental variable (IV) for the event of CEO turnover – to identify causal relations. The results showed that public institutions’ performance declined when the CEO was replaced after failing to serve the three-year term. Our findings suggest that safeguarding CEOs’ stable positions from political influences is crucial to enhancing public institutions’ performance.

Don’t stop me now! Effects of CEO turnover on the performance of public institutions