Chi, Wei and Wang, Yijiang (2007): Ownership, Performance and Executive Turnover.
Download (215kB) | Preview
To more thoroughly study the effect of ownership on management turnover, firms are classified by ownership simultaneously along two dimensions: types of owners and concentration of ownership. Under this new framework, a unique data set is used to study the sensitivity of management turnover to a company’s performance. The study confirms some of the results from previous studies. It also obtained interesting and important new results. It finds evidence that the sensitivity of management turnover to performance is curvilinear in ownership concentration, but in opposite directions under state and private ownership. It also provides evidence allowing us to rank firms in different categories of ownership by their sensitivity of management turnover to performance: Concentrated private ownership has the highest sensitivity, concentrated state ownership the lowest, and the two categories of dispersed ownership, one with a private investor and the other with the state as the largest shareholder, in between. Important policy implications of these findings are discussed.
|Item Type:||MPRA Paper|
|Original Title:||Ownership, Performance and Executive Turnover|
|Keywords:||state ownership; ownership concentration; performance; executive turnover;|
|Subjects:||M - Business Administration and Business Economics; Marketing; Accounting > M5 - Personnel Economics > M51 - Firm Employment Decisions; Promotions|
|Depositing User:||Wei Chi|
|Date Deposited:||13. Jun 2007|
|Last Modified:||15. Feb 2013 15:55|
Aivazian V. A., Ge, Y., and Qiu, JP. (2005) “Corporate Governance and Management Turnover: An Unusual Social Experiment.” Journal of Banking & Finance, 29: 1459- 1481. Bardham, Pranab, and Roemer, John E. (1992). “Market Socialism: A Case for Rejuvenation.” Journal of Economic Perspectives, 6(3):101-116 Bebchuk, Lucian Arye. (1999). “A Rent-Protection Theory of Corporate Ownership and Control.” NBER working paper 7203. Denis, D. J., Denis, D. K., Sarin, A. (1997). “Ownership Structure and Top Executive Turnover.” Journal of Financial Economics, 45: 193-221 Firth, M., Fung, Peter M. Y., and Rui, Oliver M. (2006). “Firm Performance, Governance Structure, and Top Management Turnover in a Transitional Economy.” Journal of Management Studies, 43(6):1289-1330 Frye, T. and Schleifer, A. (1997). “The Invisible Hand and the Grabbing Hand,” American Economic Review, 87(2): 354-58. Franks, J. and Mayer, C. (2001). “Ownership and Control of German Corporations.” Review of Financial Studies, 14(4): 943-77. Gorton, G. and Schmid, F. (2000) “Universal Banking and the Performance of German Firms.” Journal of Financial Economics, 58(1-2): 29-80. Groves, Theodore, Hong, Yongmiao, McMillan, John, Naughton, Barry, (1994). “Autonomy and Incentives in Chinese State Enterprises.” Quarterly Journal of Economics, 109(1): 183-209 Groves, Theodore, Hong, Yongmiao, McMillan, John, Naughton, Barry, (1995). “China’s Evolving Managerial Labor Market.” Journal of Political Economy 103 (4): 873–892. Johnson, Simon, La Porta Rafael, Lopez-De-Silanes, Florencio, and Shleifer, Andrei (2000). “Tunneling.” American Economic Review, Vol. 90, No. 2: 22-27. Kaplan, Steven N. (1994a). “Top Executive Rewards and Firm Performance: A Comparison of Japan and the U.S..” Journal of Political Economy, 102 (3): 510-546. Kaplan, Steven N. (1994b). “Top Executive, Turnover, and Firm Performance in Germany.” Journal of Law, Economics and Organization, 10(1):142-59. 22 Kato, T. and Long. C. (2006). “CEO Turnover, Firm Performance, and Enterprise Reform in China: Evidence from Micro data.” Journal of Comparative Economics 34: 796-817. Laffont, Jean-Jacques and Tirole, Jean, 1993. A Theory of Incentives in Regulation and Procurement. Cambridge: MIT Press. Li, D. David, Changqi Wu and Tao Li, 2004. “Privatization in the Margin.” Working paper. Morck, Randall, Shleifer, Andrei, and Vishny, Robert W. (1988). “Management Ownership and Market Valuation: An Empirical Analysis.” Journal of Financial Economics 20: 293-315. Schleifer, Andrei, and Vishny, Robert W. (1986). “Large Shareholders and Corporate Control.” Journal of Political Economy, 94(3): 461-617. Schleifer, Andrei, and Vishney, Robert W. (1994). “Politicians and Firms.” Quarterly Journal of Economics, 109(4): 995-1025. Schleifer, Andrei, and Vishney, Robert W. (1999). The Grabbing Hand: Government Pathologies and their Cures. Cambridge, MA, Harvard University Press. Volpin, Paolo F. (2002). “Governance with Poor Investor Protection: Evidence from Top Executive Turnover in Italy.” Journal of Financial Economics, 64: 61-90. Wettenhall, Roger (2001). “Public or Private? Public Corporations, Companies and the Decline of the Middle Ground.” Public Organization Review: A Global Journal 1:13-36. Yafeh, Y. and Yosha O. (2003). “Large Shareholders and Banks: Who Monitors and How?” Economic Journal, 113(484): 128-46.