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The Value of an Heir Apparent in Succession Planning

10 Pages Posted: 19 Mar 2005  

Bruce K. Behn

University of Tennessee, Knoxville - College of Business Administration

Richard A. Riley

West Virginia University - Department of Accounting and Management Information Systems

Ya-Wen Yang

Wake Forest University - Schools of Business

Abstract

This study examines whether the equity markets value firms that have a succession plan in place. We find that firms with an heir apparent already designated upon the death of the CEO have significantly higher cumulative abnormal returns on the date of death than firms that have not identified an heir apparent. This study contributes to the existing governance/succession planning literature by providing empirical evidence that succession planning appears to be valuable to companies engaged in succession transitions.

Suggested Citation

Behn, Bruce K. and Riley, Richard A. and Yang, Ya-Wen, The Value of an Heir Apparent in Succession Planning. Corporate Governance: An International Review, Vol. 13, No. 2, pp. 168-177, March 2005. Available at SSRN: https://ssrn.com/abstract=684307

Bruce K. Behn (Contact Author)

University of Tennessee, Knoxville - College of Business Administration ( email )

453 Haslam Business Building
Knoxville, TN 37996
United States
865-974-1760 (Phone)
865-974-4631 (Fax)

Richard A. Riley

West Virginia University - Department of Accounting and Management Information Systems ( email )

Morgantown, WV 26506
United States
304-293-7849 (Phone)
304-293-0635 (Fax)

Ya-Wen Yang

Wake Forest University - Schools of Business ( email )

P.O. Box 7659
Winston-Salem, NC 27109-7285
United States
336-758-2934 (Phone)

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