Political Power Transfer,Executive Changes And Employee Allocation Efficiency Of The Local State-Owned Enterprises

The New Institutional Economics represented by North emphasizes the influence of institutional environment onto micro-behaviors of the enterprises and the regional political environment is one of the most important parts of its discussion.At present,the governance of corporate in China is converting from the administrative governance model to the economy governance model,which makes it more meaningful to explore the thought of New Institutional Economics in Chinese scenario.Official turnover indicates the political power transfer(PPT).Relevant studies show that the PPT leads to serious uncertainty to the development of local economy,and the micro-behaviors of the enterprises will suffer political shocks.Employment is the basis of the people' livelihood,which directly relates to the social stability of the nation as well as the sustainable development of the national economy.Because of the semi market employment system under administrative intervention,the state-owned enterprises absorb the majority of the social employment pressure.Will the employee allocation efficiency(EAE)undergoes changes? And what is the function route?In order to answer the questions above,this paper selects the A-listed local state-owned enterprises in China between 2005 and 2014 as the study sample,and takes the empirical research method to demonstrate the influence of the PPT onto the EAE and the mediating effect of the executive turnover between the PPT and the EAE.Based on the political “Neutral Phase”,the evasion of political costs and the rent-seeking logic,this paper finds out that the PPT will result in the scale reduction of employee in enterprises with redundant employees and scale promotion of employee in enterprises without enough employees,both of which the EAE get improved.Because of the key point the top executives take between the top and the down in the social network of the enterprises,the features of the top executives have impacts on the decision making following the PPT.Combining the game relationship between the succeed executives and the new officials,this paper probes the way in which the executive turnover acts on the relation between the PPT and the EAE.The empirical results show that the turnover of executives works as partial mediation between the PPT and the EAE,but it only happens in the local state-owned enterprises without enough employees.