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Impact of Chief Executive Officer (CEO) succession policy on CEO turnover announcement in Malaysia


Sivapregasam, Shubasini and Selamat, Aslam Izah and Abdul Rahim, Norhuda and Muhammad, Junaina (2020) Impact of Chief Executive Officer (CEO) succession policy on CEO turnover announcement in Malaysia. Asian Academy of Management Journal of Accounting and Finance, 16 (1). 127 - 153. ISSN 1823-4992; ESSN: 2180-4192


This paper presents a fresh perspective on chief executive officer (CEO) turnover, where the impact of CEO turnover on firm value is analysed based on whether the removal is planned or unplanned. A total of 146 announcements for ten years in Malaysia is examined using an event study method. The results indicate that, in general, CEO turnover announcements cause a significant reaction due to changes in the firm’s investment decisions. Specifically, a significant positive impact exists when CEO turnover occurs as planned. In a planned turnover, the negative news of the removal of the CEO is immediately minimised with the positive news of a CEO appointment, indicating the positive impact of establishing a CEO succession plan on firm value. This finding adds new knowledge to the current literature and allows policymakers to examine the establishment of a CEO succession policy.

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Additional Metadata

Item Type: Article
Divisions: Putra Business School
School of Business and Economics
DOI Number: https://doi.org/10.21315/aamjaf2020.16.1.7
Publisher: Penerbit Universiti Sains Malaysia
Keywords: CEO exit; CEO turnover announcement; CEO succession policy; Event study; Efficient market hypothesis
Depositing User: Ms. Nuraida Ibrahim
Date Deposited: 03 Sep 2021 09:22
Last Modified: 03 Sep 2021 09:22
Altmetrics: http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.21315/aamjaf2020.16.1.7
URI: http://psasir.upm.edu.my/id/eprint/89275
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