Top Management Team Human Capital Heterogeneity And Firm Performance: An Empirical Research On Chinese Private Listed Companies

In the context of global economic integration, the competition environment which all the companies are facing is becoming more and more complicate. Senior managers who master business strategy formulation and decision-making are critical to the company development. As the limitations of individual ability, senior managers need to operate as a team. The research on TMT has become the focus of scholars.At present, China is in the transition to a market economy. Private company is the promoters of marketization reform. Executives of private companies are the result of market choice, whose business decision is less subject to government control and intervention. So it can reflect the relationship between TMT characteristic and firm performance. Private listed company executive members'psychological characteristics, behavioral patterns are different from those top managements of other countries, also different from those executive managers of our state-owned listed company. Team members on the characteristics of the impact on the company performance are also different. This paper applies the upper echelons to the Chinese's current imperfect market environment, analyzing the relationship between the heterogeneity of the private listed companies TMT human capital and firm performance.For the TMT of the Chinese's private listed companies, the heterogeneity of human capital has not only the general heterogeneity(age, education level, occupation, team tenure), as family members have management positions in family business, which also has a special heterogeneity that is the family involvement heterogeneity.The first part of this article will be empirical analysis on the relationship between the general heterogeneity of private listed company and firm performance. At first uses 284 private listed companies as the research samples in Shenzhen and Shanghai, proposes four research hypotheses (the relationship between age, education level, professional sources, team tenure heterogeneity and firm performance). And then uses SPSS 17.0 software tools to analyze data and test hypothesis. The results of the study show that, for the private listed companies in China, the age heterogeneity of TMT human capital is closely related to firm performance. The more decentralized age structure, the more benefit to improve firm performance. The Professional sources heterogeneity is negatively correlation with firm performance. The team members with a variety of professional experience, the views on the issues are inconsistent, easily lead to decision-making conflict, which would damage the firm performance.The second part of this article, we will do further research of family involvement. Through the empirical research data of the family-owned listed company in Shenzhen and Shanghai, we get the following conclusions:firstly, the actual controller involved in management positions is positively correlated with firm performance; secondly, other family members involved in management positions is positively correlated with firm performance; thirdly, the family involvement level index is negatively correlate with firm performance; fourthly, the deviation coefficient of the actual controllers have family control rights and cash flow rights is negatively correlate with firm performance.Chinese institutional context and cultural traditions are quite unique. Analyzing the relationship of TMT heterogeneity and firm performance under this social backgrounds. Considering the family members' will and the genetic relationship between family members affects the executive decision-making. This research may broaden the application of Upper Echelons Theory in China. The results enrich the contents of top management team research. It will provide a new angle for further TMT research on family-owned company in China.