Research On The Influence Of Executive Tenure On Firm Performance Of Listed Companies In Chinathe Evidence From

In the modern enterprise system, as one of the centers of power, executives have a significant impact on enterprise. For the development of the enterprises, the executive tenure is also a very important issue. The tenure may bring high performance to an enterprise, but also may reduce the performance. Since1995, the replace of executive tenure has increased significantly globally. The tenure of general manager is shortened, which seems to be a new trend. In recent years, large number of cases of the frequent change of executives has been found in our country, the rate of manager’s replacement is increasing, and the tenure is shortening.As a whole, the researches about the relationship between executive tenure and firm performance have been carried through in the western social and economic context according to the upper echelons theory. It would produce regionally parochialism for the above research conclusions accordingly. Although the relationship between the executive tenure and firm performance is drawing more and more attention from the domestic and foreign, standardized empirical studies on it are still relatively few. This study wants to sort out the relationship between the executive tenure and firm performance in the face of the current situation. It has a strong theoretical and practical significance.First, it wants to test the applicability of theoretical conclusions of executive term based on the context of Western culture in China, and compare the difference, look forward to the development and improvement of the theory of executive tenure.Secondly, most of the existing research concern is the relationship between executive tenure, executive compensation, R&D expenditures. This study wants to collect the data of listed companies, study the relationship between executive tenure and firm performance from the empirical point of view. In addition, the study of executive tenure and performance relationship also has a strong practical significance. In view the manager market system in China is not perfect, the study of the relationship between executive tenure and corporate performance is not thorough and mature. This study choose the listed companies as samples, and collect data, research executive tenure and corporate performance, to promote the improvement of business performance, to provide reliable recommendations.In this paper, the structure is divided into the following six parts:The first part is the introduction. The main contents include research background, significance, related concepts defined, and build content and basic framework of this research.The second part is literature review, collected the existing research results. Sum up the executive tenure research at home and abroad.The third part is the theoretical foundation, discussed the human capital theory, principal-agent theory, upper echelons theory.The fourth part is the empirical research design, combined with the above theoretical analysis and the actual situation of China’s listed companies, put forward the hypotheses of this article. In order to verify whether the assumptions are true, this article established two models. Use excel and stata analysis the data.The fifth part is empirical analysis. First of all, described each variable statistics, followed by the correlation analysis. Use the multiple linear regression analysis, Test the soundness of the model.The six part is the conclusions and outlook of the research. The conclusions drawn in this article are mainly the following four aspects:First, executive tenure have significant impact on firm performance, and is the positive U-shaped relationship. Second, executive age will affect the relationship of executive tenure and corporate performance, executive age has a positive effect on business performance. Third, nature of the enterprise will affect the relationship of executive tenure and corporate performance. Fourth, if the executive is in his last year of his position, the business performance was significantly lower than the other years.The main contribution of this paper lies in the following aspects:Fist, the perspective is fresh. Most of the research has focused on the relationship between the study of executive compensation, equity incentive and corporate performance relationship or research executive tenure and remuneration, equity ratio, R&D expenditures. Lack the study on executive tenure, and even less on the basis of empirical research. Second, foreign executive term is relatively mature, but the theory is based on Western social and cultural background, with the obvious geographical characteristics. In China, executive life cycle is generally shorter, enterprises faced with the external environment are quite different from foreign. Therefore, we draw on existing research base on the term of executives, combined with China’s specific national conditions and conduct research, carried out the inspection of foreign executives term applicability of the theory in China, and the rich on executive tenure and firm performance. The research results have important practical value.Second, the improvement of the research model. Compared with the previous model, the study add more factors that may affect the business performance, such as executives age, to be controlled by these factors, the empirical model is more complete. In addition, this study is not only concerned about the direct relationship of executive tenure and firm performance, but also considers the effect of the executive age, the corporate nature on the relationship of the executive tenure and firm performance.In this paper, there are still some deficiencies, it is reflected in the theoretical model. The model does not consist of TMT risk propensity, and executive change attitudes. The research methods only concerns with cross-sectional data, does not use long time series study.