Study On The Influence Of Vertical Dyad Linkage In Top Management Team On The Performance Of Listed Bank In China

The banking industry has stepped into profound reform under the impact of Internet finance and interest rate liberalization, and the drop of profits and increase of non-performing loans, arising from the increasingly tightened interest spread of deposit and loan, have been the major problems commonly faced by the banking industry.. The listed bank must focus on improving its operating decisions and reinforcing corporate governance under the great security and profitability challenges. Due to separation of ownership and control, the corporate governance relies on a good management team.Since Hambrick & Mason initiated the upper echelons theory in Columbia University in 1984, more and more people have turned their attention to the influence of the top management team on the business performance, strategic choice, earnings management, mergers and acquisition and separation rate, etc. as the theory is continuously being modified and developed. However, most the of the study puts its emphasis on the demographics of the CEO and the top management team such as sex, age, education background, discipline and tenure rather than the influence of vertical dyad linkage in the top management team. In 1989, Tsui and O’Reilly introduced the vertical dyad linkage to the demographics study, focusing on the demographics difference of the "superior-inferior" vertical dyad linkage as well as impact of this difference on the employee’s working enthusiasm, the superior’s work satisfaction to the inferior, the inferior’s confidence and loyalty to the superior, efficiency and quality of decision-making and stability of team. The study on the vertical dyad linkage and the company performance generally comes to different conclusions and such factors as industry difference and enterprise developing stage may influence the consistency of the conclusions. Therefore, this paper will start from the vertical dyad linkage of the top management team of the listed bank to study its influence on the long-and short-term performance of the listed bank.This paper reviews the study on the vertical dyad linkage of the top management team and the corporate performance at home and abroad and then explains the Similarity/attraction theory, upper echelons theory and modified upper echelons theory and multi-theory integrated model related to the construction of top management team, as well as the tournament theory and equity theory associated with the executive compensation. In addition, this paper collects information on the top management team and financial data of the listed bank from 2009 to 2014 and check verify whether the vertical dyad linkage differences in terms of the sex, age, education background and remuneration of the top management team will influence the long-and short-term performance of the bank based on the empirical study and analysis by using a design model, thus to explore the development trend of the management team of the listed bank in China.According to the empirical analysis results, (1) the "president-inferior" vertical dyad linkage characteristics in terms of age are positively correlated to the short-term performance ROE of the listed bank, i.e., the age difference between the president and the top management team will improve the short-term performance of the listed bank; (2) the "president-inferior" vertical dyad linkage characteristics in terms of education background are positively correlated to the short-term performance ROE of the listed bank, i.e., the education background difference between the president and the top management team will improve the short-term performance of the listed bank; (3) the "president-inferior" vertical dyad linkage characteristics in terms of remuneration are negatively correlated to the short-term performance ROE of the listed bank, i.e., the remuneration difference between the president and the top management team will significantly decrease the short-term performance of the listed bank; (4) the "president-inferior" vertical dyad linkage characteristics in terms of sex is not significantly correlated to the short-term performance ROE of the listed bank; (5) Tobin’s Q Ratio concerning the long-term performance of the listed bank is not significantly correlated to the "president-inferior" vertical dyad linkage characteristics in terms of sex, age, education background or remuneration.