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Succession planning vs. agency theory: a test of Harris and Helfat's interpretation of plurality announcement market returns

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  • Wallace N. Davidson III
  • Carol Nemec
  • Dan L. Worrell

Abstract

In this note we respond to Harris and Helfat's (1998) reinterpretation of the results in Worrell, Nemec, and Davidson (1997). Harris and Helfat argued that the negative stock market response associated with plurality announcements could be the result of inadequate corporate succession planning rather than with the agency cost explanation. Our results, here, show that duality and plurality announcements do not hurt shareholder wealth as long as there is an heir apparent and, therefore, are more consistent with the succession planning explanation than with agency theory. Copyright © 2001 John Wiley & Sons, Ltd.

Suggested Citation

  • Wallace N. Davidson III & Carol Nemec & Dan L. Worrell, 2001. "Succession planning vs. agency theory: a test of Harris and Helfat's interpretation of plurality announcement market returns," Strategic Management Journal, Wiley Blackwell, vol. 22(2), pages 179-184, February.
    • Handle: RePEc:bla:stratm:v:22:y:2001:i:2:p:179-184
    DOI: 10.1002/1097-0266(200101)22:23.0.CO;2-E
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    Cited by:

    1. Hassan, M. Kabir & Houston, Reza & Karim, M.Sydul & Sabit, Ahmed, 2023. "CEO duality and firm performance during the 2020 coronavirus outbreak," The Journal of Economic Asymmetries, Elsevier, vol. 27(C).
    2. Ahrens, Jan-Philipp & Uhlaner, Lorraine & Woywode, Michael & Zybura, Jan, 2018. "“Shadow emperor” or “loyal paladin”? – The Janus face of previous owner involvement in family firm successions," Journal of Family Business Strategy, Elsevier, vol. 9(1), pages 73-90.
    3. Wallace Davidson & Yixi Ning & David Rakowski & Eahab Elsaid, 2008. "The antecedents of simultaneous appointments to CEO and Chair," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 12(4), pages 381-401, November.
    4. Dedman, Elisabeth, 2016. "CEO succession in the UK: An analysis of the effect of censuring the CEO-to-chair move in the Combined Code on Corporate Governance 2003," The British Accounting Review, Elsevier, vol. 48(3), pages 359-378.

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