Ownership, Performance and Executive Turnover

To better understand the relationship between different types of firm ownership and management turnover, this study classifies ownership along two dimensions: the type of owner and the concentration of ownership. Within this framework, a unique data set is used to study the impact of management turnover on a company’s performance. This study, in addition to confirming some of the results from previous studies, includes interesting and important new results. Most importantly, it finds evidence that the sensitivity of CEO turnover to performance is weaker in state-controlled firms than in non-state firms, and varies according to different subtypes of private ownership. We also demonstrate that the turnover–performance relationship is curvilinear in ownership concentration, but that this relationship moves in opposite directions under state and private ownership. Important policy implications of these findings are discussed