Sales Maximization or Profit Maximization? How State Shareholders Discipline their CEOs in China*
(2012) In Asia-Pacific Journal of Financial Studies 41(3). p.347-375- Abstract
- This study examines the determinants of Chief Executive Officer (CEO) turnover in Chinese state-owned firms. Based on a sample of 1 555 turnover cases among listed firms in China during the period 19992003, we obtain three main results. First, CEO turnover is negatively related to the sales performance but not the profitability of the core business. Second, the negative relationship between CEO turnover and sales is stronger for firms with excessive employment and higher organizational slack. Third, there is a significant post-turnover increase in sales but a decline in profitability of the core business. Overall, our evidence suggests that state shareholders put a greater emphasis on sales generation than on profitability when they... (More)
- This study examines the determinants of Chief Executive Officer (CEO) turnover in Chinese state-owned firms. Based on a sample of 1 555 turnover cases among listed firms in China during the period 19992003, we obtain three main results. First, CEO turnover is negatively related to the sales performance but not the profitability of the core business. Second, the negative relationship between CEO turnover and sales is stronger for firms with excessive employment and higher organizational slack. Third, there is a significant post-turnover increase in sales but a decline in profitability of the core business. Overall, our evidence suggests that state shareholders put a greater emphasis on sales generation than on profitability when they monitor their CEOs. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/2890544
- author
- Opper, Sonja LU ; Wong, Sonia and Yang, Yong
- organization
- publishing date
- 2012
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- State ownership, Managerial monitoring, China's listed firms, G3, L2
- in
- Asia-Pacific Journal of Financial Studies
- volume
- 41
- issue
- 3
- pages
- 347 - 375
- publisher
- Wiley-Blackwell
- external identifiers
-
- wos:000305505900005
- scopus:84863643061
- ISSN
- 2041-9945
- DOI
- 10.1111/j.2041-6156.2012.01076.x
- language
- English
- LU publication?
- yes
- id
- 4ac5c503-7a34-4924-96e1-8298b585f729 (old id 2890544)
- date added to LUP
- 2016-04-01 09:48:27
- date last changed
- 2022-01-25 08:53:19
@article{4ac5c503-7a34-4924-96e1-8298b585f729, abstract = {{This study examines the determinants of Chief Executive Officer (CEO) turnover in Chinese state-owned firms. Based on a sample of 1 555 turnover cases among listed firms in China during the period 19992003, we obtain three main results. First, CEO turnover is negatively related to the sales performance but not the profitability of the core business. Second, the negative relationship between CEO turnover and sales is stronger for firms with excessive employment and higher organizational slack. Third, there is a significant post-turnover increase in sales but a decline in profitability of the core business. Overall, our evidence suggests that state shareholders put a greater emphasis on sales generation than on profitability when they monitor their CEOs.}}, author = {{Opper, Sonja and Wong, Sonia and Yang, Yong}}, issn = {{2041-9945}}, keywords = {{State ownership; Managerial monitoring; China's listed firms; G3; L2}}, language = {{eng}}, number = {{3}}, pages = {{347--375}}, publisher = {{Wiley-Blackwell}}, series = {{Asia-Pacific Journal of Financial Studies}}, title = {{Sales Maximization or Profit Maximization? How State Shareholders Discipline their CEOs in China*}}, url = {{http://dx.doi.org/10.1111/j.2041-6156.2012.01076.x}}, doi = {{10.1111/j.2041-6156.2012.01076.x}}, volume = {{41}}, year = {{2012}}, }