Fresh in the Saddle: The Influence of a New CEO's Vision and Origin, and CEO Succession Type on Market Actors' Reactions

Nikolaos Kavadis*, Mariano L. M. Heyden, Jatinder S. Sidhu

*Corresponding author af dette arbejde

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review


CEO succession is a critical event in the life of a company. How external stakeholders respond to it, can affect the company's valuation. This study investigates how securities analysts' and investors' reactions to CEO succession are affected by the interplay between the charisma of the new CEO's vision, the new CEO's origin (whether an insider or outsider), and the type of CEO succession (whether routine, dismissal or interim). Drawing on the literature on signaling, we suggest that because a charismatic vision emits a positive signal about the company's future performance, it will affect market actors' reactions by either weakening or strengthening the influence of the signals emitted by other succession context contingencies, namely, CEO origin and succession type. To test our predictions regarding analysts' and investors' reactions, we respectively analyze panel data and conduct an event study. The results support most of our predictions. We discuss the study's contributions and implications.
TidsskriftLong Range Planning
Udgave nummer2
Antal sider16
StatusUdgivet - apr. 2022

Bibliografisk note

Published online: 3. November 2020.


  • CEO succesion
  • CEO origin
  • Charismatic vision
  • Market performance
  • Signaling theory