Replacement Of Senior Management And Economic Consequences

The turnover of top management is one of the most important decisions the board of directors made in one corporation. As a key control mechanics for managers, such issue is widely researched by accounting and finance researchers. It is relevant both for stock market and corporate management. A magnitude of publication on this field provided us a solid basis for further study.China has developed its own stock market for more than ten years. During this period, a lot of listed companies'top managers were turnover. But what factors caused such turnovers? Did such turnovers have some common properties? And what economic consequences did such turnovers bring for the companies? These three questions provided an essential framework for this paper. When answering the above questions, I hope I can find out the deep problems in corporate governance, especially the validity of corporate control mechanism of China's listed companies, by studying the relationship between the corporate performance and the turnover of top management.Basing on prior researchers'theories and empirical models, using specific data and rich cases from China, I provide a numbers of empirical findings on how and why Chinese companies change their top management. Finally, some preliminary policy suggestions are given. More specifically, this paper is arranged in eight chapters. Each chapter's content is following:Chapter 1 is introduction part. In this chapter, I explained why I chose to make this research and what this paper's structure was.In chapter 2, I made a general review on the research literatures related to the change of top management. Because such research is just at the rudimentary stage in China, most literatures I could review are from American top academic journals. These literatures can be classified into the following three groups: (1) research on the relationship between the shift of controlling rights and the turnover of top management; (2) research on the relationship between the top management turnover and corporate operating performance; (3) research on the capital market's reaction to such event. Most literatures agree that the shift of controlling rights will cause top management...