PPTPX_papersChang_2009_JCF

Governancewithmultipleobjectives:EvidencefromtopexecutiveturnoverinChina,ChangandWong(2009)JournalofCorporateFinance,15(2009):230244,中山大学连玉君arlionn,Introduction,Corporategovernance:?Existingstudiesonmanagerialturnovermostlyfocusonprivately-controlledfirmsExistingstudiesassumeshareholdershavethesameincentivestructuretodisciplinemanagersunderallcircumstances.Weprovideempiricalevidenceonthemonitoringofmanagersinstate-ownedfirmsWeassumeshareholdershaveatime-varyingobjectivefunctionthatdependsonfirmperformance,profit-andloss-makingfirmsseparately,Introduction,State-ownedfirmsStateshareholdersareagentsofthegovernmentSocial,political(employmentopportunities)v.s.personalobjectives(personalwealth,jobsecurity)v.s.FirmperformanceDifferentsituationsleadtodifferentlevelsofimportanceattachedtotheobjectivesandthendifferentimportanceoffactors(e.g.,performance,socialandpoliticalfactors)indeterminingmanagerialturnover,Pre-turnoverperformancemanagerialturnoverpost-turnoverperformanceStateshareholdersattachgreaterimportancetofirmperformancewhenfacingfinanciallossesthanintimesofprofit;StrongincentivestofiretheincumbentmanagersandtohireandmonitorthenewmanagerswiththeabilitytoimprovethatperformancewhenfacingfinanciallossesReasons:Greatergovernmentpressureasfinanciallossisaburdenongovernmentbudgets(subsidy)andonstate-ownedbanks(lowcostloans);Lessresourcesforstateshareholderstoservepersonalobjectives,Introduction,Hypothesis,Loss-makingfirms:PoorperformanceCEOturnoverBetterperformanceMoresignificantnegativerelationshipbetweenpre-turnoverprofitabilityandCEOturnoverManagerialturnoverinthosefirmsismorelikelytobefollowedbysignificantimprovementsinperformance,Model:Pre-turnoverperformanceandmanagerialturnover,LogitregressionmodelPr(ForcedCEOturnover=1)=F(Performance;ControlVariables)WhereF(z)=ez/(1+ez),Control-groupUsingfirmperformanceinbothyear0andyear1asthebenchmarksMatcheachfirmthathasaCEOturnovertooneinthesameindustrywhosefirmperformanceinthecorrespondingyearwaswithin+/20%ofthesamplefirmsperformancebutwithnoturnoveroccurringintheeventyearandinthethreeyearsprecedingtheturnover.Ifmultiplefirmssatisfythesecriteria,thenweincludethefirmwhoseassetsizeisclosesttothatoftheturnoverfirmasthecontrolfirm,Managerialturnoverandpost-turnoverperformance,Variables,Performancemeasures:ROA,Industry-adjustedreturnonassets(IROA),Three-yearmovingaverageofROA(MROA)Three-yearmovingaverageofIROA,Variables,ControlVariables:CEOsage(Age),numberofyearsaCEOhasservedinalistedfirm(Tenure),existenceofadualitystructure(Duality),Leverage,size,ownershipnatureofthelargest(stateshareholdersorlegalpersonshareholders),Variables,CEOturnoverPersonsholdingtheformaltitleofeitherGeneralManagerorChiefExecutiveareidentifiedasCEOsIfafirmunderwenttwoormoreturnoversinthesameyear,only1isrecorded.ForcedCEOturnoverExcluderetirement,health(includingdeath),corporategovernancereform,changeincontrollingshareholder,legaldisputes;Excludethattakeupapositionthatisbetterthantheirpreviousmanagerialposition；voluntarydepartures；tenurelessthanoneyear.Includenoinformationavailable；retirementbefore55,Data,Samplerange:1995-2001Excludeprivateshareholdersastheultimatecontrollingshareholders；excludefinancialfirmsandlistedonlyintheB-sharemarketExcludeanyfirmlistedforlessthansixmonthsandfirmswithnegativeequityEliminateobservationswithmissingvaluesROAandLeverageareWinsorizedatthe1stand99thpercentiles,Turnoverrate:overall,Turnoverrate：byreasons,Turnoverrate：byDestinations,Note:这个工作量非常大，我们在Follow的过程中，没有做这个。,Summarystatistics,Datainsight,Notes,T-statisticsforMROA(MIROA)arepotentiallyoverstated,asthereisalackofindependenceacrossobservationsforagivenCEO.UsingtheHuber/White/sandwichrobustmethodwithadjustmentforwithin-clustercorrelationsforeachCEOPearsoncorrelationtest,correlations0.5Ensuremulticollinearityisnotaproblem,wecalculatethevarianceinflationfactors(VIF)foreachindependentvariable.TheseVIFsneverexceed2,whichsuggestnoseriousmulticollinearityproblems,Robustness,Differentincentivestoservepoliticalandsocialobjectiveswhentheirfirmsaremakingprofits;CentralgovernmentVSLocalgovernments:ShareholdersoffirmsownedbycentralgovernmentplacegreateremphasisonsocialandpoliticalobjectivesthanthoseoffirmsownedbylocalgovernmentsFiscaldecentralizationinduceslocalgovernmentstoplacegreateremphasisoneconomicperformancerelativetopoliticalobjectives,Robustness,2、Firmsinregionswithdifferentfiscalconditions：Baietal.(2000)showlocalgovernmentsinregionswithpoorfiscalconditionshaveagreaterincentivetouseSOEstoservetheirsocialandpoliticalobjectives.Chenetal.(2004)showlistedChinesefirmsappointmorepoliticallyconnectedCEOsiftheyarelocatedinregionswithlargerfiscaldeficits.LOCAL：adummyvariablethatequals1ifalistedfirmisownedbyalocalgovernmentand0ifitisownedbythecentralgovernment；EFICIT：dummyvariablethatequals1iftheprovincesbudgetarydeficitislargerthanthemedianlevelofthecountry；theirinteractiontermswithperformancemeasures,Robustness,Robustness,Useeitherages60or65asthebenchmarkfortheclassificationofforcedretirementIncludeturnoversthatareassociatedwithlegaldisputesasforcedturnovers.FindingsConsistentresultsareobtainedwiththesealternativeclassificationschemes.,Robustness,FrequencyofboardmeetingsInvolvementofaboardchairpersoninthemanagement：adummyvariablethatequals1ifachairpersonreceivesasalaryand0ifheorshereceivesonlyanhonorariumFindingsAgreaterfrequencyofboardmeetingsispositivelyandsignificantlyrelatedtoforcedturnovers;ExistenceofachairpersonwhoreceivesasalaryisnegativelyrelatedtotheturnoverrateAlloftheo