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| Author: | Tian, J. Haleblian, J. Rajagopalan, N. |
| Title: | The effects of board human and social capital on investor reactions to new CEO selection |
| Journal: | Strategic Management Journal
2011 : JUL, VOL. 32:7 p. 731-747 |
| Index terms: | chief executive officers board of directors human capital financial markets corporate governance directors executives share prices agency theory USA |
| Language: | eng |
| Abstract: | This article investigates the effect of directors' human capital and social capital on investor reactions to the board's CEO selection decision. It is argued that human capital and social capital affect the stock market reactions to new CEO appointments. In a sample of 208 new CEO appointment in U.S. manufacturing companies between 1999 and 2003, it was found that the stock market reacted positively to the appointments made by boards with higher levels of human and social capital. It was also found that the effect of internal social capital was stronger when the new CEO was an insider rather than an outsider. |
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