This study investigates market reactions to announcements of CEO turnover and finds that forced turnovers are not accompanied by positive returns, which contradicts the broad view that firing a CEO sends a positive signal to the market. This contradiction is further explored by focusing on the...

When there is uncertainty about a CEO's quality, news about the firm causes rational investors to update their expectation of the firm's value for two reasons: Updates occur because of the direct effect of the news, and also because news leads investors to update their assessment of the CEO's...

On theoretical grounds, monitoring of top executives by the (supervisory) board is expected to be value relevant. The empirical evidence is ambiguous and we analyze three non-competing explanations for this ambiguity: (i) The positive effect on firm value of board monitoring is hidden in stock...

This paper is concerned with the ability of marketing investments to convey information from the “black box” of the firm to participants in the financial markets. We focus on the context of sales force resizing announcements in the pharmaceutical industry because the sales force comprises...

This paper analyses the 53 managerial sackings and resignations from 16 stock exchange listed English football clubs during the nine seasons between 2000/01 and 2008/09. The results demonstrate that on average, a managerial sacking results in a post-announcement day share price rise of 0.8%,...

Firms with high levels of organization capital, a firm-specific production factor provided by key employees, are known to be risky and earn high stock returns. We argue that fragility of organization capital -- its sensitivity to potential disruptions -- is an independently important determinant...

We analyze the optimal contract between a risk-averse manager and the initial shareholders in a two-period model where the manager's investment effort, carried out in period 1, and her current effort, carried out in period 2, both impact the second-period profit, so that it may be difficult to...

We find that firms with a top management counsel (TMC) have lower stock price crash risk than other firms. We further show that firms with a TMC issue more negative relative to positive earnings guidance and use more negative relative to positive words in their annual report filings, compared to...

We examine the investor reaction to misstatement news for Australian listed firms from 2006 to 2013. We find 4.1% of firm-years have a misstatement and 79% of misstatements are disclosed initially only in the periodic filings (stealth misstatements). We find no investor reaction for the average...

We examine the role of short sellers in forced turnovers. Controlling for various stock return measures, short interest predicts forced turnovers and is higher before turnovers that reveal more private information. Using Regulation SHO as a natural experiment, we show that unrestricted short...