Research On Stock Price Effect Of Executive Turnover Announcement Of Listed Company

The chairman and general manager are the core figures responsible for setting goals,planning strategies,and grasping the direction in the operation of the company,and they play an important role in the performance and development of the company.When there are personnel alterations in these two positions,the company's operation and management will be affected in the future.After the announcement of the turnover of the chairman or general manager,the investors in the securities market will analyze the impact of this event on the value of the company's investment,and conduct the trading of the stock according to their judgment,which may lead to abnormal fluctuations in the stock price.The stock price effect of the executive turnover event has not yet reached a consensus conclusion in China,and this paper has a certain significance to enrich the research results in the field of executive turnover by studying the abnormal returns of the stock price before and after the announcement of the change of the chairman and general manager.This paper first sorts out the domestic and international research status of stock price effect of executive turnover,analyzes the problems and shortcomings of existing research results.After defining the concepts and categories of this paper,the issue of the stock price effect of the executive turnover announcement is derived from the perspective of principal-agent theory and so on,then the mechanism of the impact of executive turnover events on stock price is analyzed.In the empirical part,this paper conducts strict data screening on the sample of executive turnover announcements between 2011 and 2018,calculates the cumulative abnormal returns during the event window of the executive turnover announcement based on the event study method,and conduct a robustness test to ensure the accuracy of the results.Then this paper analyzes the group differences of the stock price effect of the executive turnover announcement,analyzes the sample according to the market situation,profit growth,successor source and other factors,and initially determines what factors affect the stock price effect.Finally,this paper uses multiple regression analysis to analyze the factors affecting the market reaction of executive change announcement.The empirical results show that the executive turnover announcement has caused the stock price to generate a significantly negative cumulative abnormal rate of return during the announcement window period,and this effect is mainly generated before the event announcement date,indicating that there are still information leakage and insider trading issues in China's stock market.The analysis of the stock price effect before the announcement found that the market reaction to executive turnover is better when the market is advancing than when the market goes down.The market reaction of private companies changing executives is more negative than that of state-owned enterprises.When companies with poorer profitability change their executives,the market responds better.When the company changes its executives due to abnormal reasons,the market reaction is better than the normal change of executives.In addition,young successors and successors who hold shares in the company are more favored by the market.The analysis of the stock price effect during the entire event window period found that if the company's earnings are in a downward trend,changing executives will lead to a relatively more positive response,and if the successor executives hold the company's shares,the market reaction is relatively better.