ANALISIS REAKSI PASAR TERHADAP PENGUMUMAN PERGANTIAN CHIEF EXECUTIVE OFFICER (CEO)
This paper examines the market reaction to CEO turnover announcements measured by abnormal return. The samples consist of 55 CEO turnover announcements by using t-test to examine information content of those announcements. The author classifies turnover into two factors: (1) the process of turnover...
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| Format: | Thesis |
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[Yogyakarta] : Universitas Gadjah Mada
2014
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| Summary: | This paper examines the market reaction to CEO turnover announcements
measured by abnormal return. The samples consist of 55 CEO turnover
announcements by using t-test to examine information content of those
announcements. The author classifies turnover into two factors: (1) the process of
turnover (routine and non routine) and (2) the origin of successor (inside and
outside). Market reacts significantly positive to the turnover announcements of
routine CEO who are from inside. Differences in reaction occur on turnover
announcements of routine outside and non routine inside CEO responded
negatively significant. Market does not react to announcement of non-rutine
outside CEO turnover. The results show that investors in Indonesia react
positively to routine inside CEO turnover because investors believe that a new
CEO will continue the stategy and leadership style as well as having a lower level
of uncertainty. Negative reaction to routine outside CEO turnover due to market
does not convince that the successor will sustain the strategy of the previous CEO
and has a high degree of uncertainty. The cause of negative market reaction to
announcement of non-routine inside CEO turnover is the successor CEO will
continue the old style of leadership and are jointly responsible for the poor
performance of company. |
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