Firm performance, corporate governance, and top executive turnover in Japan

Kang, Jun‐Koo; Shivdasani, Anil

doi:10.1016/0304-405x(94)00807-d

Cited by 748 publications

(432 citation statements)

References 21 publications

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“…6 For example, the average CEO turnover rate in our sample is 21.04%, implying that more than one-fifth of the CEOs were replaced during the sample period. This figure is not only higher than that reported by Huson, Malatesta et al (2004) for US firms (9.3%) but also that provided by Kang and Shivdasani (1995) for Japanese firms (12.88%). It is close, however, to the 25.51% and 24% documented by Firth et al (2002) and Kato and Long (2006), respectively, for Chinese listed firms during the period 1995 to 2001.…”

Section: Summary Statisticscontrasting

confidence: 55%

Political capital and CEO entrenchment: Evidence from CEO turnover in Chinese non-SOEs

Cao¹,

Pan

Qian

et al. 2017

Journal of Corporate Finance

113

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Previous theoretical and empirical studies suggest that CEOs' political connections are valuable to firms. We examine whether such connections become entrenched if the expected political capital fails to materialize and the firm lacks other types of political power. Using a sample of listed non-SOEs in China, we show that politically connected CEOs have a lower probability of turnover and cause a weaker turnover-performance sensitivity than non-politically connected CEOs. Further analyses show that these turnover patterns are not consistent with alternative explanations, such as superior managerial ability, being a member of controlling families or being promoted from the inside. The turnover patterns are less pronounced in firms with alternative political power, such as connected boards or being vital to the local economy. Following the turnover of politically connected CEOs, firm performance does not necessarily undergo significant improvement. Our results call for new theories that comprehend the real effects of political connections. AbstractPrevious theoretical and empirical studies suggest that CEOs' political connections are valuable to firms. We examine whether such connections become entrenched if the expected political capital fails to materialize and the firm lacks other types of political power. Using a sample of listed non-SOEs in China, we show that politically connected CEOs have a lower probability of turnover and cause a weaker turnover-performance sensitivity than non-politically connected CEOs. Further analyses show that these turnover patterns are not consistent with alternative explanations, such as superior managerial ability, being a member of controlling families or being promoted from the inside. The turnover patterns are less pronounced in firms with alternative political power, such as connected boards or being vital to the local economy. Following the turnover of politically connected CEOs, firm performance does not necessarily undergo significant improvement. Our results call for new theories that comprehend the real effects of political connections.JEL classifications: G32, G34, G38

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Section: Summary Statisticscontrasting

confidence: 55%

Political capital and CEO entrenchment: Evidence from CEO turnover in Chinese non-SOEs

Cao¹,

Pan

Qian

et al. 2017

Journal of Corporate Finance

113

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“…There is evidence of the supervisory behaviour of large shareholders in the adoption of anti-acquisition amendments. Kaplan and Minton (1994), Kang and Shivdasani (1995) and Franks et al (1996) found evidence of a positive influence of large shareholders on the probability of managerial turnover in poorlyperforming firms. There is also evidence of moderation in managerial remuneration in firms that have large shareholders (Dyl 1988;Hambrick and Finckelstein 1995).…”

Section: Variablesmentioning

confidence: 99%

The effectiveness of the audit committee in Spain: implications of its existence on the auditor’s opinion

Suárez

García

Méndez

et al. 2012

SERIEs

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This research work is aimed at determining the effectiveness of the Audit Committee (AC), analyzing its impact on the reliability of accounting information issued by spanish listed companies. With this aim, we study whether certain features such as its voluntary or otherwise compulsory formation, its independence and activity lead to an improvement of financial reporting quality, which is defined as the removal of avoidable qualifications in the audit report. We considered the periods where ACs were voluntary (1998-2002) and compulsory (2003 onwards). The results obtained suggest that: (a) compulsory ACs are more effective than voluntary ones; (b) ACs with a higher proportion of independent members do not lead to greater improvements in the quality of accounting information; and (c) the number of meetings of the AC is directly related to improvements in the quality of accounting information.

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“…As the transition to a market economy will go further, we may see more visible change in empirical results of this country even in the near future. Coughlan and Schmidt (1985), Weisbach (1988), Martin and McConnell (1991), Kang and Shivdasani (1995), Denis et al (1997), Goyal and Park (2002), Abe and Oguro (2004), Huson et al (2004), and others. 2 In this paper, CEOs denote not only chief executive officers in the western terms, but also company presidents and general directors.…”

Section: Discussionmentioning

confidence: 94%

“…In addition, the average CEO tenure (7 to 8 years) and turnover frequency (10 to 11%) for Russian corporations over the past few years have been almost the same as those for American and Japanese companies. In terms of the frequency of outside CEO succession (40 to 50%), Russian firms have kept their level 10 to 20% higher than the average for corporations in developed countries (Weisbach, 1988;Martin and McConnell, 1991;Kang and Shivdasani, 1995;Muravyev, 2001;Rachinsky, 2002;Muravyev, 2003a;Abe and Oguro, 2004;Yasin, 2004). Therefore, the increasing upward trend of CEO turnover frequency shown in Figure 1 can be attributed to the accelerated development of flexibility of CEO appointment against the background of declining insider control and the aging of Soviet-generation managers (so-called "red executives").…”

Section: Managerial Turnover In Transition Russia: Literature Reviewmentioning

confidence: 99%

Impact of Corporate Governance and Performance on Managerial Turnover

Abe

Iwasaki

2009

Organization and Development of Russian Business

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Abstract. -In this paper, we deliberate the possible impacts of corporate governance and performance on managerial turnover using a unique dataset of Russian corporations. This study is different from most previous works in that we deal with not only CEO dismissals, but also with managerial turnover in a company as a whole. We find that nonpayment of dividends is correlated significantly with managerial turnover. We also find that the presence of dominant shareholders and foreign investors is another important factor in causing managerial dismissal in Russian corporations, but these two kinds of company owners reveal different effects in terms of turnover magnitude.

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Firm performance, corporate governance, and top executive turnover in Japan

Cited by 748 publications

References 21 publications

Political capital and CEO entrenchment: Evidence from CEO turnover in Chinese non-SOEs

Political capital and CEO entrenchment: Evidence from CEO turnover in Chinese non-SOEs

The effectiveness of the audit committee in Spain: implications of its existence on the auditor’s opinion

Impact of Corporate Governance and Performance on Managerial Turnover

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