Chief Executive Officer Turnovers and the Performance of China's Listed Enterprises

Abstract

This study examines the relation between chief executive officer (CEO) turnovers and performance in China's listed enterprises where controlling shareholders are state-owned entities. We obtain three results. First, we offer evidence that the likelihood of forced CEO turnover is related to the incidence of negative earnings but not to industry-adjusted return on asset. Second, we document some improvement in accounting performance following CEO turnover, but the extent of the improvement is smaller and less significant than what has been documented for U.S. and Japanese enterprises. Third, we show that there is no significant relation between CEO turnovers and stock price performance.

Keywords: CEO turnovers, enterprise performance, state and private ownership

JEL Classification: G3