CEO change and firm growth under authoritarian state capitalism

This study investigates the short-term effects of CEO change on firm growth under the conditions of complexity. Drawing primarily on information processing theory, we argue that more complex firms face greater cognitive and coordination demands, making leadership transitions particularly challenging, as newly appointed CEOs require time to process information and establish effective decision-making routines. In the context of authoritarian state capitalism, these mechanisms imply that CEO turnover may initially lead to disruption, as new CEOs require more time to adapt and operate effectively. Thus, we propose that complexity moderates negatively the short-term relationship between leadership change and firm growth. We postulate and empirically examine two sources of complexity, namely organisational complexity raising from size and group affiliation, and operations-related complexity associated with cross-border trade. Our findings, based on a dynamic panel estimator applied to a large dataset of Russian firms, show that in complex firms, CEO change negatively impact short-term growth.