Hostname: page-component-848d4c4894-p2v8j Total loading time: 0.001 Render date: 2024-05-20T12:28:33.926Z Has data issue: false hasContentIssue false

Career Mobility and Performance Evaluation of China's SOE Managerial Elites

Published online by Cambridge University Press:  15 March 2024

Linlin Zhang
Affiliation:
School of Economics and Management, Research Center for Central and Eastern Europe, Beijing Jiaotong University, Beijing, China
Feng Liu
Affiliation:
Center for Accounting Studies of Xiamen University, Xiamen, China
Xin Yuan*
Affiliation:
School of Accounting, Dongbei University of Finance and Economics, Dalian, China
*
Corresponding author: Xin Yuan; Email: xinyuan@dufe.edu.cn

Abstract

This paper examines the career mobility and performance evaluation of the leaders of China's state-owned enterprises (SOEs) at the central, provincial and prefectural levels. Using data on executive turnover within publicly listed SOEs, we find that central and local SOE leaders have a similar career flow pattern. Specifically, vertical mobility within the same business group is common and more than 60 per cent of SOE leaders leave their office within three years. Only a minority of SOE leaders achieve political promotion. We also find that performance evaluation criteria are different across central and local SOEs. The leaders who provide better economic outcomes for central SOEs obtain a higher evaluation score, while close political connections boost the promotion prospects of local SOE leaders. Overall, our findings provide granular evidence on the personnel management of China's SOEs from a comparative perspective.

摘要

摘要

本文考察了中国中央、省级和地市级国有企业管理精英的职业流动和绩效评估。利用中国国有上市公司高管更替数据,我们发现中央国企领导人与地方国企领导人的职业流动模式相似。具体而言,在同一国有集团内的纵向流动很普遍,并且超过 60% 的国有企业领导人在三年内从现任岗位离职。只有少数国企领导人能获得政治晋升。我们还发现,中央和地方国有企业的绩效评估标准不同。经济表现优异的央企领导人更能获得高分评价,而与地方政府有密切政治联系的地方国企高管在职业晋升上更具优势。本文从比较研究视角提供了中国国企人事管理的详细证据。

Type
Research Article
Copyright
Copyright © The Author(s), 2024. Published by Cambridge University Press on behalf of SOAS University of London

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bai, Chong-En, Lu, Jiangyong and Tao, Zhigang. 2006. “The multitask theory of state enterprise reform: empirical evidence from China.” American Economic Review 96(2), 353357.CrossRefGoogle Scholar
Bo, Zhiyue. 1996. “Economic performance and political mobility: Chinese provincial leaders.” Journal of Contemporary China 5(12), 135154.CrossRefGoogle Scholar
Brødsgaard, Kjeld Erik. 2012. “Politics and business group formation in China: the Party in control.” The China Quarterly 211, 624648.CrossRefGoogle Scholar
Brødsgaard, Kjeld Erik, Hubbard, Paul, Cai, Guilong and Zhang, Linlin. 2017. “China's SOE executives: drivers of or obstacles to reform?The Copenhagen Journal of Asian Studies 35(1), 5275.CrossRefGoogle Scholar
Cao, Xiaping, Lemmon, Michael, Pan, Xiaofei, Qian, Meijun and Tian, Gary. 2019. “Political promotion, CEO incentives, and the relationship between pay and performance.” Management Science 65(7), 2947–65.CrossRefGoogle Scholar
Cao, Yuanzheng, Qian, Yingyi and Weingast, Barry R.. 1999. “From federalism, Chinese style to privatization, Chinese style.” Economics of Transition 7(1), 103131.CrossRefGoogle Scholar
Cartier, Carolyn. 2016. “A political economy of rank: the territorial administrative hierarchy and mobility in urban China.” Journal of Contemporary China 25(100), 529546.CrossRefGoogle Scholar
Chang, Eric C., and Wong, Sonia M.L.. 2009. “Governance with multiple objectives: evidence from top executive turnover in China.” Journal of Corporate Finance 15(2), 230244.CrossRefGoogle Scholar
Chen, Donghua, Kim, Jeong-Bon, Li, Oliver Zhen and Liang, Shangkun. 2018. “China's closed pyramidal managerial labor market and the stock price crash risk.” The Accounting Review 93(3), 105131.CrossRefGoogle Scholar
Chen, Shihua, Lu, Changchong, Jiang, Guangsheng and Wang, Yaru. 2015. “Guoqi gaoguan zhengzhi jinsheng dui qiye binggou xingwei de yingxiang – jiyu qiye chengzhang yali lilun de shizheng yanjiu” (The effect of SOE executives’ political promotion on corporate M&A behaviour – an empirical study based on the theory of corporate growth pressure). Guanli shijie 9, 125136.Google Scholar
Chen, Xiaoguang Shawn, Liu, Yong and Xu, Xianxiang. 2020. “Dynamics of local cadre appointment in China.” China Economic Review 64, 101559.CrossRefGoogle Scholar
Chen, Zhihong, Guan, Yuyan and Ke, Bin. 2013. “Are stock option grants to directors of state controlled Chinese firms listed in Hong Kong genuine compensation?The Accounting Review 88(5), 1547–74.CrossRefGoogle Scholar
Choi, Eun Kyong. 2012. “Patronage and performance: factors in the political mobility of provincial leaders in post-Deng China.” The China Quarterly 212, 965981.CrossRefGoogle Scholar
Dedman, Elisabeth. 2003. “Executive turnover in UK firms: the impact of Cadbury.” Accounting and Business Research 33(1), 3350.CrossRefGoogle Scholar
Defond, Mark L., and Hung, Mingyi. 2004. “Investor protection and corporate governance: evidence from worldwide CEO turnover.” Journal of Accounting Research 42(2), 269312.CrossRefGoogle Scholar
Du, Fei, Tang, Guliang and Young, S. Mark. 2012. “Influence activities and favoritism in subjective performance evaluation: evidence from Chinese state-owned enterprises.The Accounting Review 87(5), 1555–88.CrossRefGoogle Scholar
Edin, Maria. 2003. “State capacity and local agent control in China: CCP cadre management from a township perspective.” The China Quarterly 173, 3552.CrossRefGoogle Scholar
Fan, Joseph P.H., Wong, Tak Jun and Zhang, Tianyu. 2007. “Politically connected CEOs, corporate governance, and post-IPO performance of China's newly partially privatized firms.” Journal of Financial Economics 84(2), 330357.CrossRefGoogle Scholar
Firth, Michael, Fung, Peter M.Y. and Rui, Oliver M.. 2006. “Corporate performance and CEO compensation in China.” Journal of Corporate Finance 12(4), 693714.CrossRefGoogle Scholar
Gao, Jie. 2015. “Pernicious manipulation of performance measures in China's cadre evaluation system.” The China Quarterly 223, 618637.CrossRefGoogle Scholar
Goldstein, Avery. 1994. “Trends in the study of political elites and institutions in the PRC.” The China Quarterly 139, 714730.CrossRefGoogle Scholar
Groves, Theodore, Hong, Yongmiao, McMillan, John and Naughton, Barry. 1995. “China's evolving managerial labor market.” Journal of Political Economy 103(4), 873892.CrossRefGoogle Scholar
Jiang, Junyan. 2018. “Making bureaucracy work: patronage networks, performance incentives, and economic development in China.” American Journal of Political Science 62(4), 982999.CrossRefGoogle Scholar
Kardon, Isaac B., and Leutert, Wendy. 2022. “Pier competitor: China's power position in global ports.” International Security 46(4), 947.CrossRefGoogle Scholar
Kato, Takao, and Long, Cheryl. 2006. “Executive turnover and firm performance in China.” American Economic Review 96(2), 363–67.CrossRefGoogle Scholar
Keister, Lisa A. 1998. “Engineering growth: business group structure and firm performance in China's transition economy.” American Journal of Sociology 104(2), 404440.CrossRefGoogle Scholar
Landry, Pierre F., , Xiaobo and Duan, Haiyan. 2018. “Does performance matter? Evaluating political selection along the Chinese administrative ladder.” Comparative Political Studies 51(8), 10741105.CrossRefGoogle Scholar
Leng, Ning, and Zuo, Cai. 2022. “Tournament style bargaining within boundaries: setting targets in China's cadre evaluation system.” Journal of Contemporary China 31(133), 116135.CrossRefGoogle Scholar
Leutert, Wendy. 2018. “The political mobility of China's central state-owned enterprise leaders.” The China Quarterly 233, 121.CrossRefGoogle Scholar
Leutert, Wendy, and Vortherms, Samantha A.. 2021. “Personnel power: governing state-owned enterprises.” Business and Politics 23(3), 419437.CrossRefGoogle Scholar
Li, Bobai, and Walder, Andrew G.. 2001. “Career advancement as Party patronage: sponsored mobility into the Chinese administrative elite, 1949–1996.” American Journal of Sociology 106(5), 13711408.CrossRefGoogle Scholar
Li, Hongbin, and Zhou, Li-An. 2005. “Political turnover and economic performance: the incentive role of personnel control in China.” Journal of Public Economics 89(9–10), 1743–62.CrossRefGoogle Scholar
Lin, Li-Wen. 2017. “Reforming China's state-owned enterprises: from structure to people.” The China Quarterly 229, 107129.CrossRefGoogle Scholar
Liu, Feng, and Zhang, Linlin. 2018. “Executive turnover in China's state-owned enterprises: government-oriented or market-oriented?China Journal of Accounting Research 11(2), 129149.CrossRefGoogle Scholar
Manion, Melanie. 1985. “The cadre management system, post-Mao: the appointment, promotion, transfer and removal of Party and state leaders.” The China Quarterly 102, 203233.CrossRefGoogle Scholar
Oi, Jean C. 1985. “Communism and clientelism: rural politics in China.” World Politics 37(2), 238266.CrossRefGoogle Scholar
Oi, Jean C., Babiarz, Kim Singer, Zhang, Linxiu, Luo, Renfu and Rozelle, Scott. 2012. “Shifting fiscal control to limit cadre power in China's townships and villages.” The China Quarterly 211, 649675.CrossRefGoogle Scholar
Shambaugh, David. 2008. “Training China's political elite: the Party school system.” The China Quarterly 196, 827844.CrossRefGoogle Scholar
Shih, Victor, Shan, Wei and Liu, Mingxing. 2010. “Gauging the elite political equilibrium in the CCP: a quantitative approach using biographical data.” The China Quarterly 201, 79103.CrossRefGoogle Scholar
Walder, Andrew G. 1995. “Career mobility and the communist political order.” American Sociological Review 60(3), 309328.CrossRefGoogle Scholar
Walder, Andrew G. 2011. “From control to ownership: China's managerial revolution.” Management and Organization Review 7(1), 1938.CrossRefGoogle Scholar
Wong, Stan Hok-Wui, and Zeng, Yu. 2018. “Getting ahead by getting on the right track: horizontal mobility in China's political selection process.” Journal of Contemporary China 27(109), 6184.CrossRefGoogle Scholar
Xin, Qingquan, Bao, Anze and Hu, Fang. 2019. “West meets East: understanding managerial incentives in Chinese SOEs.China Journal of Accounting Research 12(2), 177189.CrossRefGoogle Scholar