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CEO turnover in China: the role of market-based and accounting performance measures

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CEO turnover in China : the role of market-based and accounting performance measures. / Conyon, Martin; He, Lerong.

In: European Journal of Finance, Vol. 20, No. 7-9, 2014, p. 657-680.

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Conyon, Martin ; He, Lerong. / CEO turnover in China : the role of market-based and accounting performance measures. In: European Journal of Finance. 2014 ; Vol. 20, No. 7-9. pp. 657-680.

Bibtex

@article{f3226cd576964b60a9b0f78e3205ab23,
title = "CEO turnover in China: the role of market-based and accounting performance measures",
abstract = "We investigate the relationship between chief executive officer (CEO) turnover and firm performance in China's publicly traded firms. We provide evidence on the use of accounting and market-based performance measures in CEO turnover decision. We also investigate the moderating roles of noise in performance measures, firm growth opportunities, state-owned enterprises, and corporate governance reform on the weights attached to these performance measures. We observe that Chinese listed firms rely more on accounting performance than on stock market performance when determining CEO turnover. Firms with noisier performance measures and larger growth opportunities rely less on both accounting performance and stock market performance in CEO replacement decision. State-controlled firms are more likely to use accounting performance to determine CEO turnover. Finally, we observe that the weight attached to the accounting performance measure is significantly reduced and the weight attached to the stock market performance measure is significantly increased after the governance reform. We also observe that the reform has different impact on state-owned firms and private firms in terms of the sensitivity of CEO turnover to firm performance.",
keywords = "CEO turnover, China , corporate governance , performance measures",
author = "Martin Conyon and Lerong He",
year = "2014",
doi = "10.1080/1351847X.2012.676559",
language = "English",
volume = "20",
pages = "657--680",
journal = "European Journal of Finance",
issn = "1351-847X",
publisher = "Routledge",
number = "7-9",

}

RIS

TY - JOUR

T1 - CEO turnover in China

T2 - the role of market-based and accounting performance measures

AU - Conyon, Martin

AU - He, Lerong

PY - 2014

Y1 - 2014

N2 - We investigate the relationship between chief executive officer (CEO) turnover and firm performance in China's publicly traded firms. We provide evidence on the use of accounting and market-based performance measures in CEO turnover decision. We also investigate the moderating roles of noise in performance measures, firm growth opportunities, state-owned enterprises, and corporate governance reform on the weights attached to these performance measures. We observe that Chinese listed firms rely more on accounting performance than on stock market performance when determining CEO turnover. Firms with noisier performance measures and larger growth opportunities rely less on both accounting performance and stock market performance in CEO replacement decision. State-controlled firms are more likely to use accounting performance to determine CEO turnover. Finally, we observe that the weight attached to the accounting performance measure is significantly reduced and the weight attached to the stock market performance measure is significantly increased after the governance reform. We also observe that the reform has different impact on state-owned firms and private firms in terms of the sensitivity of CEO turnover to firm performance.

AB - We investigate the relationship between chief executive officer (CEO) turnover and firm performance in China's publicly traded firms. We provide evidence on the use of accounting and market-based performance measures in CEO turnover decision. We also investigate the moderating roles of noise in performance measures, firm growth opportunities, state-owned enterprises, and corporate governance reform on the weights attached to these performance measures. We observe that Chinese listed firms rely more on accounting performance than on stock market performance when determining CEO turnover. Firms with noisier performance measures and larger growth opportunities rely less on both accounting performance and stock market performance in CEO replacement decision. State-controlled firms are more likely to use accounting performance to determine CEO turnover. Finally, we observe that the weight attached to the accounting performance measure is significantly reduced and the weight attached to the stock market performance measure is significantly increased after the governance reform. We also observe that the reform has different impact on state-owned firms and private firms in terms of the sensitivity of CEO turnover to firm performance.

KW - CEO turnover

KW - China

KW - corporate governance

KW - performance measures

U2 - 10.1080/1351847X.2012.676559

DO - 10.1080/1351847X.2012.676559

M3 - Journal article

VL - 20

SP - 657

EP - 680

JO - European Journal of Finance

JF - European Journal of Finance

SN - 1351-847X

IS - 7-9

ER -