STOCK MARKET REACTION TO CEO CERTIFICATION: THE SIGNALING ROLE OF CEO BACKGROUND

• 成果类型: Article
• 署名作者: Zhang, Yan; Wiersema, Margarethe F.
• 署名单位: Rice University; University of California System; University of California Irvine
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.772
• 发表日期: 2009
• 页码: 693-710
• 关键词: CEO certification; CEO credibility; signaling; UPPER ECHELONS; Sarbanes-Oxley Act

摘要

As a direct result of the corporate scandals that started with Enron and led to general unrest in the financial markets, the Securities and Exchange Commission required chief executive officers (CEOs) and chief financial officers of large publicly traded companies to certify their financial statements. Using market signaling theory, we propose that attributes of the CEO send important signals to the investment community as to the credibility of the CEO certification and thus the qualify of the firm's financial statements, which in turn impact the stock market reaction to the CEO certification. We find that a CEO's shareholdings and external directorships are positively related to the abnormal returns of CEO certification. Further, the stock market penalizes a fit-ill with a CEO who is associated with the firm's prior financial restatement and rewards a firm with a CEO who is appointed after the firm's prior financial restatement. Copyright (C) 2009 John Wiley & Sons, Ltd.