Effects of Executive Migrations and Subsequent Restructuring Events

We consider whether the market conditions its reactions to an executive's move from an Origin Company to a Destination Company on the executive's past performance and any other information impounded in the market reaction to the executive's emigration from the Origin Company. We also examine whether the market perceives a benefit in the hiring of an executive with an industry-specific background. We find that, with regard to migration events, the performance of the Origin Company-accounting and stock-before the executive's migration and the market reaction to the emigration are positively associated with the market reaction to the immigration event only when the Origin Company and the Destination Company are members of the same industry. With respect to an Origin Company's contiguously subsequent write-off and restructuring events, we conjecture that subsequent restructuring events signal hitherto unrecognized shortcomings of the emigrating executive. We find that, ceteris paribus, the market reaction to the Destination Company's stock at the time of the Origin Company's announcement of a post-immigration restructuring is significantly negative, but again only when the Origin Company and the Destination Company are members of the same industry. Furthermore, contrary to previous studies, we find that Origin Companies' and Destination Companies' stocks exhibit negative reactions to their own restructuring events