Firm Performance, Governance Structure, and Top Management Turnover in a Transitional Economy

Firth, Michael; Fung, Peter M.Y.; Rui, Oliver M.

doi:10.2139/ssrn.337843

Cited by 161 publications

(116 citation statements)

References 26 publications

Supporting

Mentioning

104

Contrasting

Order By: Relevance

“…Therefore, it is expected that CEOs with significant shareholdings are more powerful and less likely to be replaced than CEOs without an ownership interest in the firm (Zald, 1969). In contrast to the high stock ownership of executives in capitalist countries, executives of Chinese listed firms generally hold very low share ownership (Firth et al, 2006). The average and highest ratios of shares held by CEOs of the sample companies in this study are 0.0066% and 0.47% respectively.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 82%

“…In terms of the Chinese Company Law enacted in 1993, the CEO is monitored by the board of directors, who are appointed at the shareholders' general meeting. In addition, listed firms are charged with making profits and maximizing shareholders' wealth (Firth et al, 2006). Under this circumstance, firm performance has become an important criterion used by boards of directors to evaluate CEOs' effectiveness.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

“…It is worth noting that there have been several studies on executive turnover in the Chinese context (e.g., Cheng, Li, & Tong, 2008;Firth et al, 2006;Kato & Long, 2006). Of these studies, a lot of attention has been paid to chairperson turnover.…”

Section: Ceo Tenure and Forced Ceo Turnovermentioning

confidence: 99%

“…Of these studies, a lot of attention has been paid to chairperson turnover. For example, Firth et al (2006) focus on chairperson turnover. Although Kato and Long (2006) investigated CEO turnover, they considered the chairperson to be the CEO as long as he or she is paid by the listed firm.…”

Section: Ceo Tenure and Forced Ceo Turnovermentioning

confidence: 99%

“…From the agency theory standpoint, CEOs achieve their power when shareholder and board monitoring systems are ineffective, thus weak corporate governance provides executive power to pursue activities that attain their selfinterests (Grabke-Rundell & Gomez-Mejia, 2002) and insulate them from the pressure of turnover. Thus, the empirical results of studies focused on the US may not be applied to China because of the unique corporate governance characteristics of the Chinese listed companies, such as the highly concentrated ownership structure, severe interventions of the government, the weak legal protection for shareholders, and a negligible market control mechanism (Firth, Fung, & Rui, 2006;Hu, Tam, & Tan, 2010). By this token, it is necessary to investigate forced CEO turnover from the perspective of CEO power and firm performance in a Chinese context.…”

mentioning

confidence: 99%

See 4 more Smart Citations

Can a powerful CEO avoid involuntary replacement?—An empirical study from China

Li-li

Lowe

2009

Asia Pac J Manag

View full text Add to dashboard Cite

This study examines the impact of CEO power on forced CEO turnover from five perspectives, namely firm performance, structural power, ownership power, CEOs' political connections, and tenure power. Using panel data of listed companies in China, this study finds that firm performance has negative effects on forced CEO turnover. Similarly, CEOs' structural power, political connections, and tenure power can increase their ability to be insulated from involuntary replacement. In addition, two factors of CEO ownership power, the state-controlling shareholder and serving as the representative of the largest shareholder, appear to be effective in reducing the likelihood of forced CEO turnover.Keywords CEO . Forced turnover . Power . Chinese firms Academic literature has long been interested in the factors that determine CEO turnover since the 1960s partly due to the significant impact of a CEO on strategy formation and organization performance (

show abstract

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 82%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Section: Ceo Tenure and Forced Ceo Turnovermentioning

confidence: 99%

Section: Ceo Tenure and Forced Ceo Turnovermentioning

confidence: 99%

mentioning

confidence: 99%

See 3 more Smart Citations

Can a powerful CEO avoid involuntary replacement?—An empirical study from China

Li-li

Lowe

2009

Asia Pac J Manag

View full text Add to dashboard Cite

show abstract

Corporate governance and firm efficiency: evidence from China's publicly listed firms

Lin¹,

2008

Manage Decis Econ

120

View full text Add to dashboard Cite

This paper applies a two-stage, double bootstrapping data envelope analysis approach to investigate whether and to what extent various distinctive corporate governance practices affect productive efficiency in a sample of 461 publicly listed manufacturing firms in China between 1999 and 2002. We find that firm efficiency is negatively related to state ownership while positively related to public and employee share ownership. In addition, the relationship between ownership concentration and firm efficiency is U-shaped, indicating the presence of tunneling activities by the largest shareholder. Among three types of controlling shareholder, state exerts the most negative impact on firm efficiency, followed by state-owned legal entities. These results provide strong evidence that political interferences have reduced firm efficiency. It shows that the proportion of outside directors and the number of board meetings are positively associated with firm efficiency, suggesting that board of directors can be an effective internal governance mechanism. Furthermore, provincial market development, a proxy for the strength of external governance mechanism, is positively related to firm efficiency. Overall, our findings illustrate that restructuring state-owned enterprises via improvements in corporate governance has enhanced firm efficiency, but partial privatization without transfer of ownership and control from the state to the public remains a major source of inefficiency in corporate China. Copyright © 2008 John Wiley & Sons, Ltd.

show abstract

Independent directors' dissent on boards: Evidence from listed companies in China

Khanna

2015

Strategic Management Journal

137

View full text Add to dashboard Cite

Firm Performance, Governance Structure, and Top Management Turnover in a Transitional Economy

Cited by 161 publications

References 26 publications

Can a powerful CEO avoid involuntary replacement?—An empirical study from China

Can a powerful CEO avoid involuntary replacement?—An empirical study from China

Corporate governance and firm efficiency: evidence from China's publicly listed firms

Independent directors' dissent on boards: Evidence from listed companies in China

Contact Info

Product

Resources

About