Ceo Replacement, Company Performance And Corporate Governance

The paper has set up a theoretical frame based on corporate governance to explore the CEO turnover and corporate performance, and we also have taken the CEO turnover of Chinese listed firms, a representative of transitional economies, as an example to carry on empirical analysis.In the survey part of related theories about the paper, we introduced the governance theory and its internal and external control mechanisms; we also introduced the agency theory, institutional theory and stewardship theory and related studies about CEO turnover.In the theoretical part of the paper, we explored how corporate governance and corporate performance affected the CEO turnover among mature economies. We examined the determinants that drive CEO turnover and the factors that influence the board's decision-making process for CEO turnover.In the empirical part of the paper, we combined the governance theory with CEO turnover, and empirically analyzed CEO turnover for Chinese listed firms, to verify those mechanism and the key factors of CEO turnover we collected from mature economies. Then we compared the differences between mature markets and transitional economies.The final part of the paper provided some suggestion for corporate governance in transitional economies, particularly for the control mechanism for preventing the opportunistic behavior of CEO in the listed firms.Our findings also suggest several avenues for future research. Since the sample that we perform empirical tests is limited to the current period, more theoretical work is needed to understand the ex-post effects of CEO turnover on the corporate performance and corporate governance. Another potential area of research is to determine the reasons behind CEO turnover, for voluntary and involuntary turnovers have different implications.