Sudden top management turnovers and their effects on capital markets: Evidence from a country with low managerial discretion

摘要: Top managers can impact company outcomes only to the extent that they possess discretion. Managerial discretion has been shown differ among managers, companies, industries, and nations. In low countries, corporate governance mechanisms, as well national values culture, limit range of actions available hence their individual on firm performance. We analyze factors constitute environment in Germany, show theoretically empirically capital markets attribute little importance top managers. To gauge manager influence, we use standard event study methodology stock price reactions around announcements management turnover. Our data sample consists 344 turnovers (172 for CEOs, 172 CFOs) companies listed German DAX MDAX from 1998 through 2008. aims explain turnover a environment. Contrary studies conducted high find that, classification (e.g., forced or routine turnover, insider outsider succession) are not significant explaining abnormal returns. thus introduce another classification, level expectedness argue this variable better predict If is unexpected, uncertainty will occur with announcement prices fall temporarily. expected, prior existing be reduced probability increases, leading positive returns date. This new help resolve inconclusive have found previous studies.