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Article: Firm profitability, state ownership, and top management turnover at the listed firms in China: A behavioral perspective

TitleFirm profitability, state ownership, and top management turnover at the listed firms in China: A behavioral perspective
Authors
KeywordsCorporate Governance
Behavioral Theory
Government Ownership
Ownership Issues
CEOs
Issue Date2009
PublisherWiley. The Journal's web site is located at http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-8683
Citation
Corporate Governance, 2009, v. 17 n. 4, p. 443-456 How to Cite?
AbstractManuscript Type: Empirical Research Question/Issue: We attempt to clarify the relationships between firm profitability, state ownership, and top management turnover at partially privatized firms by applying the behavioral theory of organizational search, which proposes that firms focus on target in performance evaluation. Research Findings/Results: Using data from a large sample of the listed firms in China from 1999 to 2002, we find that firm profitability and state ownership are negatively related to top management turnover only when firm profitability is below target (measured by industry median). We also find that top management turnover has a positive impact on subsequent firm profitability when it occurs under performance below target, but has a negative impact when it occurs under performance above target. Lastly, we find that top management turnover under performance below target has a positive impact on subsequent firm profitability when the state is not the largest shareholder, but has no impact when the state is the largest shareholder. Theoretical Implications: Our study provides strong support for the argument that state ownership weakens corporate governance quality in partial privatization. It also demonstrates the contribution of the behavioral theory of organizational search to the study of top management turnover in emerging economies where it is difficult to identify forced turnover. Practical Implications: To further improve the economic performance of partially privatized firms, states should continue to dilute their ownership. In addition, firms should carefully manage top management turnover when performance is above target.
Persistent Identifierhttp://hdl.handle.net/10722/192331
ISSN
2015 Impact Factor: 2.169
2015 SCImago Journal Rankings: 1.119
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorShen, Wen_US
dc.contributor.authorLin, Cen_US
dc.date.accessioned2013-10-24T01:49:59Z-
dc.date.available2013-10-24T01:49:59Z-
dc.date.issued2009en_US
dc.identifier.citationCorporate Governance, 2009, v. 17 n. 4, p. 443-456en_US
dc.identifier.issn0964-8410en_US
dc.identifier.urihttp://hdl.handle.net/10722/192331-
dc.description.abstractManuscript Type: Empirical Research Question/Issue: We attempt to clarify the relationships between firm profitability, state ownership, and top management turnover at partially privatized firms by applying the behavioral theory of organizational search, which proposes that firms focus on target in performance evaluation. Research Findings/Results: Using data from a large sample of the listed firms in China from 1999 to 2002, we find that firm profitability and state ownership are negatively related to top management turnover only when firm profitability is below target (measured by industry median). We also find that top management turnover has a positive impact on subsequent firm profitability when it occurs under performance below target, but has a negative impact when it occurs under performance above target. Lastly, we find that top management turnover under performance below target has a positive impact on subsequent firm profitability when the state is not the largest shareholder, but has no impact when the state is the largest shareholder. Theoretical Implications: Our study provides strong support for the argument that state ownership weakens corporate governance quality in partial privatization. It also demonstrates the contribution of the behavioral theory of organizational search to the study of top management turnover in emerging economies where it is difficult to identify forced turnover. Practical Implications: To further improve the economic performance of partially privatized firms, states should continue to dilute their ownership. In addition, firms should carefully manage top management turnover when performance is above target.-
dc.languageengen_US
dc.publisherWiley. The Journal's web site is located at http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-8683-
dc.relation.ispartofCorporate Governanceen_US
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.rightsThis is the pre-peer reviewed version of the following article: [Corporate Governance, 2009, v. 17 n. 4, p. 443-456], which has been published in final form at [http://dx.doi.org/10.1111/j.1467-8683.2009.00725.x]. Authors are not required to remove preprints posted prior to acceptance of the submitted version.-
dc.subjectCorporate Governance-
dc.subjectBehavioral Theory-
dc.subjectGovernment Ownership-
dc.subjectOwnership Issues-
dc.subjectCEOs-
dc.titleFirm profitability, state ownership, and top management turnover at the listed firms in China: A behavioral perspectiveen_US
dc.typeArticleen_US
dc.description.naturepreprint-
dc.identifier.doi10.1111/j.1467-8683.2009.00725.xen_US
dc.identifier.scopuseid_2-s2.0-68249135738en_US
dc.identifier.volume17en_US
dc.identifier.issue4en_US
dc.identifier.spage443en_US
dc.identifier.epage456en_US
dc.identifier.isiWOS:000268052300004-

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