The Market Reaction On SME Board Executives' Departure

As an important financing platform for small and medium-sized enterprises,small and medium-sized board is of great significance.Small and medium-sized board listed companies are generally small in size,and senior executives often have more power,controlling and controlling the development direction and process of the company to a large extent.Different executives may have great differences in management,decision making,philosophy and other aspects due to their personal characteristics and backgrounds.Previous studies mainly focused on the executive turnover of all listed companies and the executive turnover of gem market,but there were few studies on the impact of the executive turnover of listed companies on the stock price.In addition,the focus of the previous research more how the event generated abnormal fluctuations,on which factors will affect the market reaction to executives event study is less,especially the executive's personal characteristics,such as gender,job title,financial background,academic background,overseas background,as explained variables are much rarer.The research object of this paper is listed companies on China's small and medium-sized board.Using the event research method,this paper takes listed companies in the small and medium-sized board market in 2018 where senior executives left their jobs as samples.After data screening and elimination,this paper first studies the stock market reaction before and after the whole event.And then,to the company's cumulative excess return of be explained variable,with the sex of the departing executives,the title of a technical post,education background,financial background,academic background,overseas background as the explained variable,and company level factors and the age of departing executives,the working time,leaving reason,shareholdings as control variables,multiple regression model is established.The study found that executive departures generated a positive market reaction throughout the window.That is,when senior executives leave a listed company,the market thinks it is a positive event,which may be conducive to the improvement of the company's operating conditions and profitability,and thus promote the development of the company.Through the establishment of multiple regression model,this paper finds that the resignation of senior executives with master degree or above has a significant positive market reaction,while the resignation of senior executiveswith overseas background has a significant negative market reaction.The gender,title,financial background and academic background of the departing senior executives have no significant influence on the market reaction.Finally,based on the research results,this paper proposes relevant suggestions to investors,listed companies and regulatory and policy departments.