The Effects Of Control Rights Transferring On Executive Turnover

Since the 1960s, the control rights market has been an important part of foreign securities market, which also has been considered as the important mechanisms to prevent the executives' moral hazard. Consequently, our objective is to confirm that whether the control rights transferring, controlling shareholder and the nature (public or private) of control rights are harmful for the control rights market's oversight role, and under this conditions how control rights market to function. The securities market and the corporate governance structure are characteristic in our country, so the study on the external supervised role of the control rights market is necessary. In recent years, executive turnover which has become more and more frequently in China's listed companies, was particularly reflected in the companies after the transfer of rights of control. Analyzing the cause of executive turnover, studying listed company's governance structure and the control rights market will contribute to improve the corporate governance structure and perfect the mechanism for selecting personnel.The paper based on control rights transferring, theoretical analysis and statistical measurement analysis was used to study the effects of operating performance and transfer characteristics of control rights on executive turnover. The empirical results discovered that the relation between executive turnover and operating performance before control rights transferring was significantly negatively correlated, which accounted for the supervisory role of Control rights market in China's listed companies, while the chairman turnover was related to the characteristics of the control rights transferring, which was not associated with the general manager turnover. All the data suggested that executive market is not perfect, known as "dual market" structure in China. Additionally, the findings also indicated that the chairman's appointment and removal is usually decided by government, but the manager's depended on market mechanism and corporate performance.