Research On The Relationship Between Management Turnover And Investment Efficiency

In today’s society, with the rapid development of economy and fierce competition, talents are very important for an enterprise. The cultivation and use of talents that is the first capital of a firm shows enterprise’s core competitiveness and performance. Executive staff, as the head of the company’s personnel, is the heart and soul of the company. He not only determine the company’s development strategies and policies, but also ultimately responsible for the performance of the company. In a sense, the ability of executives can determine the company’s future prospects. Due to the separation of corporate ownership and management rights, conflicts of interest between the executives and shareholders usually exist. In order to protect the interests of shareholders and restrict executives doing things for their own interests and to reduce agency costs, the company has established a series of control mechanisms to strengthen the executive supervision and constrain. According to the company’s performance levels to determine management turnover is an important part of corporate governance. After more than20years’development of securities market in China, the emergence of a large number of executive personnel changes has also in the rapid development process. Therefore, management turnover is seen as one of the company’s major strategic decisions and it has a significant effect on the future development strategy and business performance of the company.Investment activity is the core of financial activity of the enterprise and the foundation of enterprise’s financial management. Increase in enterprise value fundamentally depends on the enterprise’s investment decision and depends on the improvement of investment efficiency. Because only scientific investment decisions and efficient investment decision can bring more cash flow and add value to the enterprise. But the reality is cruel; generally, there are inefficient investment problems in enterprises. In the context of economic crisis, more and more companies are concerned. Many scholars have done a study, and most of the research is the impact on the efficiency of investment among the company’s ownership structure, debt levels and the corporate governance environment. But there is little research on executive changes and investment efficiency. The paper studies whether the executive change will affect the investment efficiency before the arrival of the change date. The study fills empty space of the investment area, and helps to improve the management capacity of senior managers in listed companies in China. It is based on the above analysis that the paper studies on the relationship between management turnover and investment efficiency is of great significance. The research of this article is as follows:Part Ⅰ, introduction. The part studies mainly on the background and significance of the research, structure of the papers and research methods and ultimately explain the research purpose and research contents; Part Ⅱ review of the literature. The part of paper mainly studies on the research status of the relationship between management turnover and investment efficiency both at home and abroad, which mainly focus on the management turnover and corporate governance, management turnover and earnings management and management turnover and corporate performance and evaluation of existing research results at home and abroad; Part Ⅲ, theoretical basis of management turnover in listed companies and investment efficiency. Based on the principal-agent theory and corporate governance theory, the paper analyzes the motivation, purpose and effect of management turnover. It defines the investment efficiency, investment characteristics and factors affecting the investment efficiency. Part Ⅳ, empirical study on management turnover and investment efficiency. The paper is using multivariate linear regression model to get the article’s conclusions. Part Ⅴ, summary of paper research and make some recommendations.