When do Appointments of Chief Product Officer (CPO) Affect Firm Value?

Abstract

This study investigates whether, and under what conditions, the appointments of Chief Product Officer (CPO) influence firm value. Drawing on signaling theory and dynamic capability theory, we conduct an event study of 121 newly created CPO appointments in publicly listed U.S. firms from 2015 to 2023. Abnormal returns are estimated using the Fama-French Five-Factor model, with robustness checks from alternative specifications. On average, CPO announcements elicit neutral market reactions. However, this effect is significantly moderated by firm- and industry-level contingencies. Firms with strong growth prospects, high advertising intensity, or operating in service sectors tend to experience more favorable investor responses, while those in highly competitive industries often face adverse reactions. These results underscore the importance of contextual fit in executive appointments. Our study contributes to the literature on emerging C-suite roles by providing empirical evidence on the strategic and symbolic value of CPOs and offering practical insights for corporate governance.

Keywords

chief product officer market value event study

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