A Study Of The Relationship Between CEO Succession And Firm Performance

In the development of modern enterprises,the principal-agent problem arises from the separation of company ownership and control.The CEO is mainly responsible for the daily operation of the company,therefore,the CEO has a major influence on the company's strategy development and long-term development.However,the CEO is employed by the principal and is responsible to the shareholders and subject to the supervision and restraint of the board of directors.In the daily operation of the organization,the CEO's personal talent and management level can affect the company's development to varying degrees.This level of impact can be reflected in business performance.Therefore,corporate performance has become an important indicator for judging CEO performance.The dual role of the CEO enhances the CEO's power in the board of directors and affects the board's supervisory role for the CEO.Therefore,this paper explores the relationship between CEO succession and business performance from the perspective of corporate governance,and examines the moderate role of CEO power.This paper mainly uses the combination of theoretical analysis and empirical test to carry out research.First,collect,collate and analyze existing literature at home and abroad for the topic selection,define the core concepts and elaborate relevant theories;Secondly,based on the core ideas of principal-agent theory,social capital theory and human capital theory,we conduct a theoretical analysis of the relationship between CEO succession and company performance,and construct a theoretical research framework for the relationship between CEO background characteristics,company performance and CEO change,and propose the research hypothesis of this paper;Finally,taking 2,316 A-share listed companies as research samples,we empirically tested the impact mechanism between CEO succession and company performance.The empirical research found that:(1)There is a significant negative correlation between CEO unconventional changes and company performance;(2)CEO power reduces CEO succession-performance sensitivity;(3)Prior CEO experience is significantly negatively correlated with company performance;(4)CEO political connections are significantly and positively related to company performance.