Study on determinants of CEO turnover in SOEs in the context of pyramid structure

In this project, we analyzed corporate governance of China’s state-owned enterprises by introducing a perspective of institutional logic, which is a new and important concept in Neo-institution theory. We identified the political logic during the process of CEO turnover in SOEs, and further explored how the pyramid structure of SOEs separates political logic from economic logic. Overall, we tried to use frontier theories to explain an important practical question. We found that, based on political logic, some factors such as tax affect CEO turnover in local SOEs. In specific, the more tax an SOE pays, the higher the possibility that its CEO will be promoted. We also found that, pyramid structure can separate political logic from economic logic. Specifically, with increase of the pyramid layer, economic logic becomes dominant, instead of political logic.

Our study has three contributions to existing studies. First, there are a lot of studies focusing on CEO turnover, and identifying many determinants of CEO turnover, such as performance, governance structure and so on. Based on these studies, our study identified factors affecting CEO turnover based on political logic, which is an important supplement to existing studies about CEO turnover. Second, one stream of literature on pyramid structure regards this kind of structure as a tool for controlling shareholders to exploit interest of minority shareholders, while the other stream treats it as a structure which can bring financing advantage. Different from these opinions, our study found pyramid structure can be used by SOEs to deal with institutional complexity, which is a new role of pyramid structure. Third, existing studies about institutional complexity and institutional logic focus on some specific industries in the context of developed countries, and there is little research about what kind of institutional complexity organizations in Chinese context are faced with. By analyzing how China’s SOEs deal with different institutional logics, this study enriched studies on institutional complexity. In addition to theoretical contribution, our conclusions also have practical significance for state-owned enterprise reform.

With the support of Ph.D. Candidate Research Innovation Fund of Nankai University, we reviewed related literature, collected and analyzed data, and finished writing some papers. One of the papers was published in a journal named “Modern Management Science”, which is in the list of core journals of Nankai University. Other papers were presented in academic conferences, both domestic and international.

Nankai University

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