Gender Succession and Market Efficiency: a Case Study of Inditex Generational Shift
Abstract
Purpose: This paper investigates the impact of Marta Ortega's succession on the closing prices of Inditex. The paper highlights the meticulous succession planning orchestrated by Amancio Ortega, Marta Ortega's extensive involvement in the business, and the supportive family dynamics that facilitated a smooth transition. This study challenges conventional notions about women in family successions and underscores the importance of effective planning and successor preparation in family businesses.
Methodology: In this article we use daily data of closing prices of INDITEX from January 3, 2011, until November 29, 2023. The methodology used is based on the concept of fractional integration.
Results: Contrary to market expectations, the results reveal a positive trend in closing prices following Marta Ortega's assumption of the non-executive chairman position. The prices showed some evidence of mean reversion and thus inefficiency, though, at the same time, a positive significant trend was observed in the price of the company since then.
Research limitations: This research is not without limitations, which open the way for future research. This research is a case study. The results may be limited by our sample. Other female successions and their impact on closing prices should be investigated. This would help to increase research on the effects on the company following female succession. Another limitation of the study concerns the period investigated. It will be interesting to review the results obtained when the period elapsed since the succession is longer.
Practical implications: This research helps to avoid the negative stereotypes associated with female succession in companies.
Originality: This research will help to understand how generational handover occurs in family businesses when the heir is also a woman.
Keywords: Gender equality; Inditex; stock market prices; fractional integration; family business, succession
DOI: https://doi.org/10.58869/EJABM10(2)/03
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