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Ownership, Performance and Executive Turnover

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  • Chi, Wei
  • Wang, Yijiang

Abstract

To more thoroughly study the effect of ownership on management turnover, firms are classified by ownership simultaneously along two dimensions: types of owners and concentration of ownership. Under this new framework, a unique data set is used to study the sensitivity of management turnover to a company’s performance. The study confirms some of the results from previous studies. It also obtained interesting and important new results. It finds evidence that the sensitivity of management turnover to performance is curvilinear in ownership concentration, but in opposite directions under state and private ownership. It also provides evidence allowing us to rank firms in different categories of ownership by their sensitivity of management turnover to performance: Concentrated private ownership has the highest sensitivity, concentrated state ownership the lowest, and the two categories of dispersed ownership, one with a private investor and the other with the state as the largest shareholder, in between. Important policy implications of these findings are discussed.

Suggested Citation

  • Chi, Wei & Wang, Yijiang, 2007. "Ownership, Performance and Executive Turnover," MPRA Paper 3545, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:3545
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    Cited by:

    1. Loukil, Nadia & Yousfi, Ouidad, 2010. "Does corporate governance affect stock liquidity in the Tunisian Stock Market?," MPRA Paper 28697, University Library of Munich, Germany, revised Feb 2011.

    More about this item

    Keywords

    state ownership; ownership concentration; performance; executive turnover;

    JEL classification:

    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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