1. The Effect of CEO Succession on Stockholder Wealth in Large Firms Following the Death of the Predecessor
- Author
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Wallace N. Davidson and Dar L. Worrell
- Subjects
business.industry ,Strategy and Management ,05 social sciences ,0211 other engineering and technologies ,021107 urban & regional planning ,Financial system ,Accounting ,02 engineering and technology ,Ecological succession ,CEO succession ,0506 political science ,Shareholder ,050602 political science & public administration ,Common stock ,Business ,Chief executive officer ,Finance - Abstract
Using event time methodology, this study explores, over the 17-year period of 1966 to 1982, the effect on the price of common stock in large publicly held corporations of Chief Executive Officer (CEO) succession following the death of each CEO's predecessor. The market was found to react positively to the announcement of internal succession, but external succession was not associated with significant abnormal returns. The findings support the importance of examining the organizational conditions surrounding succession events.
- Published
- 1987
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