Korean Academic Society of Business Administration
[ Article ]
korean management review - Vol. 50, No. 4, pp.981-1009
ISSN: 1226-1874 (Print)
Print publication date 31 Aug 2021
Received 21 Sep 2020 Revised 18 Mar 2021 Accepted 07 Apr 2021
DOI: https://doi.org/10.17287/kmr.2021.50.4.981

가족기업의 신임 최고경영자 공시에 대한 주식시장의 반응

Jinah Ryu ; Sun Hyun Park ; Dong Kee Rhee
(First Author) University of Illinois at Urbana-Champaign jinahr2@illinois.edu
(Corresponding Author) Seoul National University sunpark@snu.ac.kr
(Co-Author) Seoul National University rheedong@snu.ac.kr
Stock Market Reactions to CEO Succession in Family-Controlled Firms

This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.


We study market response toward family vs. professional CEO succession in a family-controlled firm. Drawing on theories distinguishing family CEOs from professional CEOs, we propose two competing hypotheses on whether investors react to family CEO succession more negatively (or positively) than to professional CEO succession in a family-controlled firm. We find that stock market reactions to family CEO succession are more negative compared to professional CEO succession, supporting the theoretical perspectives that stockholders consider family CEO succession as an extension of the owner family’s private benefit seeking. This negative market response to family CEO succession, however, decreases when the firm is under the market regulatory authorities’ monitoring. Our empirical analysis examining the announcement of CEO succession events in Korean public family-controlled firms between 2005 and 2016 provides strong support for our theoretical perspectives.


CEO succession, investor reaction, family firm, corporate governance


This paper is based on the first author’s master’s thesis.


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∙ The author Jinah Ryu is a doctoral student in Business Administration at the Gies College of Business, University of Illinois at Urbana-Champaign. Her research interests include organizational strategy and institutional processes.

∙ The author Sun Hyun Park is Associate Professor of Strategy and International Management at College of Business, Seoul National University. Professor Park’s research focuses on corporate governance, top management team, diversity and innovation.

∙ The author Dong Kee Rhee is Professor of Strategy and International Management at College of Business, Seoul National University. Professor Rhee’s research focuses on global competitive strategy, and corporate governance in international context, including strategies of family-owned business groups