Long-horizon event studies and event firm portfolio weights: Evidence from U.K. rights issues re-visited

Abhyankar, Abhay; Ho, Keng-Yu

doi:10.1016/j.irfa.2005.02.001

Cited by 5 publications

(2 citation statements)

References 37 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Indeed, studies of long-term abnormal returns are subjected to several biases and problems. Abhyankar and Ho (2007) raise questionable issues related to the choice of the benchmark portfolio, the method used to compute abnormal returns, the cross-sectional correlation in event time and the non-normality of abnormal returns.…”

Section: Motivation and Hypotheses Developmentmentioning

confidence: 99%

Sudden CEO vacancy and the long‐run economic consequences

Lambertides

2009

Managerial Finance

View full text Add to dashboard Cite

Purpose -The aim of this paper is to examine the long-term abnormal returns of firms that have experienced chief executive officer (CEO) succession. According to Chief Executive magazine, directors rank CEO succession as the second most important issue their firms face, the first being strategic planning. Design/methodology/approach -This study examines 202 CEO succession announcements. It utilizes two returns-generating models to calculate abnormal returns for two estimation windows of 200 trading days before and after the succession event.Findings -The results support the theory first developed by Guest (1962) that succession is an adaptive event. Specifically, this study shows that firms that experience a CEO change have positive abnormal returns, suggesting that new CEOs raise the firm performance. Moreover, this study shows that firms that experience CEO change due to CEO retirement improve firm performance in the postsuccession period, whereas succession due to CEO sudden death or illness seems to have no direct effect on the long-term performance of these firms. Finally, this study provides strong evidence that outside successions help firms raise performance more than inside successions. Research limitations/implications -Like any empirical event-study, the validity of the results depends on the absence of confounding events. Future research could be to explore the relationship between the information content of the CEO succession announcement and the market reaction. Originality/value -This paper is believed to be the first attempt to empirically examine the relation between CEO turnover and long-term firm performance through the analysis of the successor's origin and of the force initiating the change, by using an event study methodology.

show abstract

Section: Motivation and Hypotheses Developmentmentioning

confidence: 99%

Sudden CEO vacancy and the long‐run economic consequences

Lambertides

2009

Managerial Finance

View full text Add to dashboard Cite

show abstract

“…Similar studies which dealt with portfolio theory used randomly selected set of assets to construct the efficient frontier. (e.g., Abhyankar & Ho, 2007;Gourieroux & Monfort, 2005;Levy, 1983). That authors' data set was larger and more comprehensive than that used in previous research.…”

Section: Empirical Implications Of the Modelmentioning

confidence: 99%