The browser you are using is not supported by this website. All versions of Internet Explorer are no longer supported, either by us or Microsoft (read more here: https://www.microsoft.com/en-us/microsoft-365/windows/end-of-ie-support).

Please use a modern browser to fully experience our website, such as the newest versions of Edge, Chrome, Firefox or Safari etc.

Sales Maximization or Profit Maximization? How State Shareholders Discipline their CEOs in China*

På svenska

Author

  • Sonja Opper
  • Sonia Wong
  • Yong Yang

Summary, in English

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.

Publishing year

2012

Language

English

Pages

347-375

Publication/Series

Asia-Pacific Journal of Financial Studies

Volume

41

Issue

3

Document type

Journal article

Publisher

Wiley-Blackwell

Topic

  • Economics

Keywords

  • State ownership
  • Managerial monitoring
  • China's listed firms
  • G3
  • L2

Status

Published

ISBN/ISSN/Other

  • ISSN: 2041-9945