The Effect of Chief Executive Officer’ Succession on the Share Price Performance of Listed Firms in Kenya
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Date
2013-10Author
Mutwiri, Kenneth
Type
ThesisLanguage
enMetadata
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Stock markets in the world individually and collectively play a critical role in their
economies. They provide an avenue for raising funds, for trading in securities including
futures, options and other derivatives which provide opportunities for investors to
generate returns.
The performance of the stock market is influenced by a number of factors including the
change of CEO of a company and the general performance of the economy. Various
studies have been carried out in the developed countries examining the performance of
stock markets before and after CEO’s exit. These studies indicate that the stock market
react differently based on the party announcement of a new CEO.
This study analyzed the share price performance of listed companies in the Nairobi Stock
Exchange before and after CEO exit. The share prices of listed companies during the
event study and NSE month end indices for the period between 2008 and 2013 obtained
from the NSE were analyzed using the event study market model where abnormal returns
(AR) and cumulative average abnormal returns (CAAR) were derived. The results are
displayed in APA tables and graphs. The volatility that follows a CEO change was found
to have a significant impact on the performance of share prices, and listed companies’
boards should plan a succession strategy taking these effects into account. In order to find
out exact situation of how much and in which direction CEO change impacts stock
returns in Kenya (prior to change and after CEO change) a detailed analysis at the
technical level covering all aspects is required
Citation
Mutwiri,Kenneth,October,2013.The Effect Of Chief Executive Officer’ Succession On The Share Price Performance Of Listed Firms In Kenya.Publisher
University of Nairobi College of Humanities and Social Sciences