Abstract
ABSTRACT This study examines market reaction to CEO appointments at state-owned enterprises (SOEs) listed on the Warsaw Stock Exchange between 2000 and 2015. We find evidence that the market reaction to CEO turnover at SOEs is nonmonotonic. A negative market reaction dominates in a short window, whereas a positive market response prevails in a long window. In addition, we observe a significant inverted U-shaped relationship between the level of state ownership and shareholder reaction. Shareholders prefer CEO replacements at SOEs whose financial results are poor. We report a negative impact on abnormal returns if the CEO is in the pre-transition generation.
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