In newly formed industries, the formation of the dominant design and sudden changes in the competitive environment forces most companies to exit in a short period of time in a “shake-out (sharp decrease)” (e.g., Klepper & Graddy, 1990). Industries that undergo significant technological changes tend to have more severe shake-outs (Agarwal, 1998). Therefore, what should a company do to avoid withdrawal by shake-out? Among various perspectives, strengthening “CEO power” is an important factor in avoiding a shake-out (e.g., Daily, McDougall, Covin, & Dalton, 2002; Filatotchev & Toms, 2003). Therefore, in this study, we analyzed statistically the effect of CEO power on withdrawal and strategic decision-making. This study examines the Japanese online securities industry, in which technology change occurs at an extremely rapid speed. The analysis results are as follows. (1) While there is no correlation between distress and withdrawal, financial restructuring (merger of parent company) has a significant positive impact on withdrawal. (2) The stronger the “CEO power,” the more likely the company will withdraw. (3) The stronger the “CEO power,” the lower is the distress. (4) The stronger the “CEO power,” the more is the important strategy adopted. (5) Subsidiaries of domestic financial institutions tended not to adopt the important strategy.
