| Panel A: Direction of shareholder reaction | Expected direction |
| Shareholder wealth effect(Davidson et al., 1990)Signalling effects: the information component and the real component (Bonnier & Bruner, 1989)Internal monitoring mechanisms hypothesis(Denis & Denis, 1995) | Two alternative hypotheses:Positive reactionNegative reaction |
| Improved management hypothesis(Huson et al., 2004)Ability hypothesis(Baik et al., 2011; Chang et al., 2010; Murphy & Zábojník, 2004; Pessarossi & Weill, 2013)Common sense hypothesis(Grusky, 1963; Helmich, 1974; Allen et al., 1979; Dalton & Kesner, 1985; Kesner & Sebora, 1994) | Positive reaction |
| Scapegoat hypothesis(Boeker, 1992; Huson et al., 2004; Khanna & Poulsen, 1995)Vicious-circle theory(Grusky, 1960; Beatty & Zajac, 1987; Ishak & Latif, 2013) | Negative reaction |
| Panel B: Determinants of shareholder reaction | Expected impact |
| Operating performance |
| Signalling effects – the information component(Bonnier & Bruner, 1989) | The company's operating performance before the event is worse than originally expected, the market reaction is negative |
| Signalling effects – the real component(Bonnier & Bruner, 1989)Internal monitoring mechanisms hypothesis(Denis & Denis, 1995)Improved management hypothesis(Huson et al., 2004)Ability hypothesis(Baik et al., 2011; Chang et al., 2010; Murphy & Zábojník, 2004; Pessarossi & Weill, 2013)Common sense hypothesis(Grusky, 1963; Helmich, 1974; Allen et al., 1979; Dalton & Kesner, 1985; Kesner & Sebora, 1994) | Negative relationship between operating performance before the event and the market reactionInvestors expect improvements in operating performance after the event, the market reaction is positive |
| Company size |
| Organizational structure hypothesisReinganum (1985)Information asymmetry hypothesis(Miller & Rock, 1985) | Negative relationship between company size and the market reaction |
| Ownership |
| State ownership concept(Pessarossi & Weill, 2013) | Positive relationship between state ownership and the market reaction |
| Panel B: Determinants of shareholder reaction | Expected impact |
| Expropriation hypothesis(La Porta et al., 2000) | Non-linear inverted U-shape relationship between blockholder ownership and the market reaction |
| Upper echelons theory – managerial ownership(Hambrick & Mason, 1984) | Non relationship between managerial ownership and the market reaction |
| Agency theory(Jensen & Meckling, 1976) | Managerial ownership may have a positive or negative impact on the market reaction |
| Managerial entrenchment hypothesis(Morck et al., 1988; Denis et al., 1997) | Negative relationship between managerial ownership and the market reaction |
| New-appointed CEO characteristics |
| Improved management hypothesis(Huson et al., 2004)Ability hypothesis(Baik et al., 2011; Chang et al., 2010; Murphy & Zábojník, 2004; Pessarossi & Weill, 2013) | A quality of manager (managerial skills) may have a positive impact on the market reaction |
| Upper echelons theory – age(Hambrick & Mason, 1984) | Negative relationship between CEO age and the market reaction |
| Upper echelons theory – insider/outsider(Hambrick & Mason, 1984) | Insider/outsider CEO may have a positive or negative impact on the market reaction |
| Upper echelons theory – educational background(Hambrick & Mason, 1984) | The educational background of a CEO may have a positive or negative impact on the market reaction |
| Upper echelons theory – functional background(Hambrick & Mason, 1984) | The functional background of a CEO may have a positive or negative impact on the market reaction |
| CEO international experiences concept(Schmid & Dauth, 2014) | Nonlinear inverted U-shape relationship between international experiences of a CEO and the market reaction |
| Extended upper echelons theory – international experiences(Finkelstein et al., 2009) | The international experiences of a CEO may have a positive or negative impact on the market reaction |
| Extended upper echelons theory – past managerial experiences(Finkelstein et al., 2009) | Positive relationship between past managerial experiences of a CEO and the market reaction |
| Gender risk averse and overconfident hypothesis(Huang & Kisgen, 2013) | The gender of a CEO may have a positive or negative impact on the market reaction |
| Incumbent CEO characteristics |
| Extended upper echelons theory – CEO tenure(Finkelstein et al., 2009) | The length of an incumbent CEO tenure may have a positive or negative impact on the market reaction (non-linear U-shape relationship) |
| Managerial entrenchment hypothesis(Morck et al., 1988) | Positive relationship between the duration of an incumbent CEO tenure and the market reaction |
