CEO Succession,Corporate Governance And Corporate Investment

Investment is the most important corporate strategic decision,and investment efficiency directly determines the survival and development of the enterprise.As the main body of corporate investment decision-making,the role of CEO in corporate investment decision-making and implementation process is increasingly prominent.With the frequent occurrence of CEO turnover events,the impact of CEO succession on corporate investment has attracted much attention from the theory and practice.CEO succession involves multiple governance entities,and corporate governance is also an important factor in impacting corporate investment.In this context,from the perspective of CEO successor,this dissertation integrates classic theories and latest research findings in the fields of upper echelons theory,corporate investment,and corporate governance,selects A-share listed companies in Chinese Shanghai and Shenzhen stock market from 2003 to 2012 as the initial samples,and utilizes ANOVA teat,propensity score matching(PSM),ordinary least square(OLS)regression and grouped multiple regression to examine the following three problems deeply and systematically: how the CEO successors influence corporate investment,the motivation of the CEO successors to adjust investment;how corporate governance impact the investment adjustment decisions of the CEO successors.First,an in-depth study of the economic consequences of CEO succession on corporate investment adjustment is carried out in terms of investment level and investment efficiency.The dissertation finds that CEO succession has a significant impact on corporate investment decisions.In the year of CEO succession and one year after the succession,the investment level decreases and investment efficiency improve significantly.Secondly,conduct theoretical analysis and empirical test on the motivation of CEO successors' investment adjustment decision from the perspectives of strategic change matching,performance improvement,investment optimization and differences in cognition and commitment.The dissertation shows that matching strategic change,improving performance,optimizing investment and the cognitive and commitment differences are the main driving factors for CEO successor to adjust investment.In the case of a company with poor performance,over-investment before the CEO succession and a company undergoing a major strategic change after the CEO succession,the CEO successor tend to reduce the investment level and improve the investment efficiency to a greater extent.Finally,theoretical analysis and empirical test are conducted on the role of six internal and external corporate governance mechanisms on CEO successors' investment adjustment decisions,including equity structure,board independence,equity incentive,product market competition,analysts and auditors.The study finds that corporate governance can significantly promote the investment adjustment behavior of CEO successors.The higher the level of corporate governance,the greater the intensity of CEO successors to reduce investment level and improve investment efficiency.This dissertation deepens the theoretical research on the economic consequences of CEO succession and the influence of contextual factors on CEO succession process and has important practical significance for enterprises to understand,plan and manage the CEO succession process and its outcomes and improve corporate governance mechanism.