The Market's Verdict: CEO Changes and OMX-Stock Market Responses Before and During Covid-19

Sammanfattning: This paper examines the impact of chief executive officer (CEO) changes on the Swedish stock market, comparing market responses during Covid-19 to a benchmarking period that comprises preceding years. We find significant positive average abnormal returns following announcements of CEO change across both examined periods, suggesting that CEO changes are consistently favored by the market and not heavily affected by Covid-19. No significant relationship is found between abnormal returns and CEO origin, CEO gender nor firm size when tested individually. This contrasts to previous literature, where significant differences have been observed as dependent on CEO origin and firm size respectively. We instead find a significant interaction effect between CEO origin and firm size during Covid-19, where external CEOs are associated with increased abnormal returns that diminish as firm size increases.