An Empirical Study Of The Relationship Between Top Management Turnover And Firm Performance Based On Listed Companies

The separation of ownership and operation is one of the basic features of the modern enterprise system and the separation brings the principal-agent problem. With the corporate enterprises’continuing expansion of business scale, with the increasing of the raising funds and the number of shareholders, a large number of shareholders are away from the day-to-day operations of the company, and with the corporate enterprises’scale expansion, the business activities become more and more complex while the majority of the shareholders do not have the professional knowledge and skills, so allowing each shareholder to participate in the operation and management of the company is the Arabian Nights. Professional managers can effectively solve the inefficiencies problem of shareholders’ dispersion and lacking of the shareholder management knowledge and skills. They have special knowledge and skills of business management and can effectively manage companies’operations; such enterprises hire professional managers to run the company. Due to the dispersion of shareholders, the control over the company is grasped more and more in the hands of professional managers, and the interests of the owners and operators are not always consistent, So if the supervision on the managers who actually have the control rights on companies, they would pursue their own interests in the way of damaging shareholders’ interests. Top management turnover is an important part of corporate governance, of which one aspect is how to dismiss the incompetent CEOs, the other aspect select the competent ones. On the replacement of senior executives, foreign scholars have conducted in-depth study; their researches focus on two aspects of reasons, one is what factors affect the change of the executives, about which they have reached a consensus that the poor performance of the company is one of the main reasons of the executives’replacement; the other one is whether executives’replacement can bring the improvement of the performance of the company or not, about which scholars have not agreed conclusions. Some support executives replacement can indeed bring the improvement of the performance of the company; some support it can only bring a short-term performance improvements; some even support it would make the performance of the company even worse. Therefore, this article will use China’s A-share listed companies as a sample, using the methods of empirical research, to test whether top management turnover can bring the performance improvement or not.This thesis is divided into six chapters; each chapter’s executive summary is as follows:The first part is the introduction, describing the background and significance of this study, research ideas and research methods, research framework, as well as the possible innovations and shortcomings of this paper.The second part is a review of the literature on the relationship of top manager turnover and corporate performance, including literature review on how corporate performance affects top manager turnover and how top manager turnover affects corporate performance.The third part is the theoretical analysis of the top manager turnover and corporate performance, including agency theory and corporate governance theory, providing a theoretical basis for empirical research below.The fourth part is the analysis of the reasons for the interaction of top manager turnover and corporate performance.The fifth part of the empirical test for this thesis first describes the assumptions of this study, the sample selection and data sources, variable design and model building, followed by regression analysis on this basis.The full text of Part VI will summarize and make policy recommendations, pointing out the limitations of this study.