@article{dc03c57474b442d7873c6ea8559200be,
title = "Under new management: Equity issues and the attribution of past returns",
abstract = "There is a strong link between measures of stock market performance and subsequent equity issues. We find that management turnover weakens the link between equity issues and the returns that preceded the new chief executive officer (CEO). Moreover, there is a discontinuity in the distribution of equity issues around the specific share price that the CEO inherited, while there is no discontinuity around salient share prices prior to turnover. The evidence suggests that capital allocation involves an attribution of past returns not only to the firm but also to its CEO. A corollary is that a firm with poor stock market performance may be better able to raise new capital if its current CEO is replaced.",
keywords = "CEO turnover, Equity issues, Reference point, Seasoned equity offerings",
author = "Malcolm Baker and Yuhai Xuan",
note = "Funding Information: We thank Heitor Almeida, Lauren Cohen, Laura Liu, Ping Liu, Jeffrey Pontiff, Jay Ritter, Michael Roberts, Bill Schwert (the editor), Jeremy Stein, Avanidhar Subrahmanyam, Ryan Taliaferro, Jeff Wurgler, and seminar participants at Case Western Reserve University (Weatherhead), Chinese University of Hong Kong (Faculty of Business Administration), City University of Hong Kong (College of Business), University of Florida (Warrington), Harvard Business School, Hong Kong University of Science and Technology (Business School), Lingnan University (Department of Economics), Massachusetts Institute of Technology (Sloan), National University of Singapore (Business School), Singapore Management University (Business School), Tsinghua University (School of Economics and Management), the 2010 American Finance Association Annual Meetings, and the 11th Annual Texas Finance Festival for helpful comments. The authors gratefully acknowledge financial support from the Division of Research of the Harvard Business School. Publisher Copyright: {\textcopyright} 2016.",
year = "2016",
month = jul,
day = "1",
doi = "10.1016/j.jfineco.2016.03.001",
language = "English (US)",
volume = "121",
pages = "66--78",
journal = "Journal of Financial Economics",
issn = "0304-405X",
publisher = "Elsevier",
number = "1",
}