Research On The Relationship Between CEO Succession Model And Corporate Performance Volatility: The Regulatory Role Of Industry Competition

The CEO successor ability should not be simple to judge by performance,the performance of volatility is equally important, because the company governance mechanism of validity should not only reflect on the performance improvement, also reflect on the stability of the company's performance. The most past literature attention in the relationship between corporate performance and successor's behavior of for CEO selection successor's, but neglect the relationship between the successor and volatility. Nevertheless, CEO as one of the highest decision makers in the enterprise, the choice of successor problem is particularly important, but the CEO's departure and his successor inherit is a very complicated process, indications that the process with complex game with checks and balances, so will not be accurately grasp the event by independent research, it is necessary to combine two phases at different succession model.Based on the above reasons, this article relies on Higher-order theory and prospect theory to construct the theoretical framework, investigates the relationship between CEO succession mode and the stability of company's performance, as well as the volatile effects of industry competitive in this relationship.Occurred from 2007 to 2015 Shen——HU a-share CEO replacement of listed companies as research samples,exploring the relationship between the corporate volatility and the CEO succession mode, results show that the corporate CEO's change occurs, the volatility increased significantly, compared with internal successor, external successor as CEO, enterprise performance fluctuations is more significant.And successor in the former CEO of unconventional exit situation as compared to the conventional departure situations succession will significantly enhance its degree of fluctuations in performance after taking office; Considering the situation of predecessor and found that the general cases, external successor succession would also create more enterprise performance fluctuations than the internal successor;In contrast, if the former CEO leaving by unconventional case, the internal successor would make bigger volatility ofperformance to a greater extent than external successor;Finally, industry competitive play a regulatory role in the relationship, in particular when the enterprise is relatively fierce industry, although the industry itself can increase the competitive of enterprise risks, but in a certain extent, it will inhibit the positive relationship between internal successors and level of earnings volatility in abnormal situation, and industry competitive will not work significantly in regular situation .Therefore,this article can enrich enterprise CEO selection index and provide some feasible way transition period of transition.