Market Reaction to CEO Turnover: Empirical Evidence from Fortune 500 Firms

Global Finance Review

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Field Value
Title Market Reaction to CEO Turnover: Empirical Evidence from Fortune 500 Firms
Creator Karki, Dipesh
Ghimire, Binam
Subject JEL Code: G14, G15, G11
Description This paper applies event study analysis to explore the impact of change in leadership on the market return of Fortune 500 firms. The study analyzes various market reaction following the announcement of CEO's departure along with the circumstances leading to it. The results show that on the occurrence of the event, market reacts positively in line with “ability hypothesis”. Especially inside succession comparatively found to provide better market reaction than outside succession. However the type of departure showed no statistically significant abnormal returns Further abnormal return prior to the event was witnessed suggesting information leak. Overall the study is consistent with Efficient Market Hypothesis.
Publisher PiscoMed Publishing Pte Ltd
Date 2019-09-21
Type info:eu-repo/semantics/article

Format application/pdf
Source Global Finance Review; Vol 1, No 1 (Published); 46-56
Language eng
Rights Copyright (c) 2019 GLOBAL FINANCE REVIEW

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