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What Triggers Top Management Turnovers in China?

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Listed:
  • Cheng, Peter
  • Li, Jack L.
  • Tong, Wilson H.S.

Abstract

Studies on management turnover in Chinese companies typically find that turnover decisions are associated with companies' accounting performance. Using a sample of Chinese company turnovers during 2000–2003, we disaggregate their net-earnings into core, recurring non-core, and other non-recurring components. Analyzing these earnings components, we show that turnover decisions for government firms are related negatively only to recurring earnings which consist of operating, administrative and financial expenses. Leverage also plays a significant role suggesting the concern that high debt levels may reduce the impacts of the Chinese SOE reforms. However, turnovers in private firms are associated with poor core earnings, a result similar with profit-maximizing firms in developed economies.

Suggested Citation

  • Cheng, Peter & Li, Jack L. & Tong, Wilson H.S., 2008. "What Triggers Top Management Turnovers in China?," Journal of Contemporary Accounting and Economics, Elsevier, vol. 4(1), pages 50-87.
    • Handle: RePEc:eee:jocaae:v:4:y:2008:i:1:p:50-87
    DOI: 10.1016/S1815-5669(10)70029-1
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    References listed on IDEAS

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    Cited by:

    1. Zhong, Ruohan & Li, Yanxi & Wang, Yun, 2021. "Multiple large shareholders, control contests, and forced CEO turnover," Emerging Markets Review, Elsevier, vol. 48(C).
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    3. Xinxin Ma & Ichiro Iwasaki, 2021. "Does communist party membership bring a wage premium in China? a meta-analysis," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 19(1), pages 55-94, January.
    4. Lili Pi & Julian Lowe, 2011. "Can a powerful CEO avoid involuntary replacement?—An empirical study from China," Asia Pacific Journal of Management, Springer, vol. 28(4), pages 775-805, December.

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    More about this item

    Keywords

    G34; G39; China; CEO turnovers; earnings; SOE reform; leverage;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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