Empirical Research Relations On Turnovers Of Top Management And Performance Of The Listed Companies In China

Just as Jensen & Warner (1988) said:"turnover of firm top managers is a key index understanding the variable restraining manager and judging the efficiency of corporate governance mechanism".It is the most serious agency problem that the unqualified top manager staying in the company,So the effective corporate governance system should be able to timely punish the top manager performing poorly . The paper has systematically narrated the literatures about top management turnover on the home and abroad,drawed a few conclusions:An unanimous conclusion has still not been achieved in these literatures,there has been not a lot of papers on the top management turnover that have fully analyzed on the subject,furthermore, these literatures focused on the abroad listed company.The great change has happened on the business structures and market circumstances with the rapid economic development.In consequence,we will analyze the factors on top management turnover and the relation of top management turnover and corporate performance in the Chinese listed company as fully as possible.On the basis of Classical theories,such as Principal-agent Theory,Human Capital Theory,Hierarchy of needs,Home of Modern Management Theory,the relation of top management turnover and corporate performance will be analyzed by drawing the foreign research result and creating the logistic models.First,The paper did a statistical analysis on the current situation of turnover of top management from 2002 to 2006 years,The result shows that the data of turnover quantities gradually increased then decreased,the quantities of chairman change and general manager change reached a peak in 2004.The average age of changed chairman and manager is 52.17 years old and 49.45 years old that is higher than the average age of all the top management Chinese listed companies which is 49.64 years old of chairman and 46.41 years old of manager.View from working years,top management turnover are mostly forced.Competition in product market will bring greater impact on manager change than chairman change.Top management turnover will been more difficult when positions of manager and chairman are combined.poor firm performance is an important factor for the Top management turnover.Second,set the variables,select the sample,create regression model then carry out empirical analysis,The results showed:an important reason for the forced turnovers is poor performance,there is not relation between the normal turnovers and firm performance.Top management turnover will promote corporate performance,chairman change will bring on better long-term performance,it is not significant in short term.Nevertheless,General manager is opposite.The summary of regression result about other factors affecting turnovers illustrate that competition in product market bring greater impact on manager in the State Holding Listed Companies,General manager has more minor status than chairman,the performance has been not significant effected when they were been changed.The greater affect will occurre when duties were decomposed between Chairman and General manager in the Unity Leadership Structure listed company.Finally,the paper draw a conclusion and put forward some instructive recommendations.