Chief Executive Officer's MBA Background,Firm's Profitability And Wealth Effects On Stock Market

Does an MBA matter in China? On the one hand, MBA degree is considered to be a degree that can improve graduates'income, but on the other hand, the employers'evaluation of MBA is not very high. This study purposes to examine the link between CEO successor's MBA degree and the company's profitability in China's listed firms, moreover, we also want to examine the link between CEO successor's MBA degree and the wealth effects of CEO succession. We select listed firms happened CEO turnover and the successor is MBA during 2000-2006 as our samples.Our result shows that firms'profitability was improved in the second year after the MBA succession the CEO. When we divided the MBAs for four styles, we find that MBAs come from foreign schools and foreign cooperation schools can improve the firms'profitability significantly, and MBAs come from autonomous schools and commercial schools have no significantly effects to the firms'profitability. When we try to find some link between MBAs and firms'risks, we find that MBAs come from foreign schools can reduce the firms'risks, and others have no significantly effects to the firms'risks. Moreover, our results show there is a positive relation between MBA background and the wealth effects of CEO succession.