Under the background of corporate governance in China transiting from administration governance to economic governance, the feature of administrative executive appointment and dismissal in SOEs is difficult to be ignored. This paper has a hand collection of hometown information and position changes of provincial SOEs' chairmen and general managers from 2004 to 2014, and employs hometown information to distinguish whether they are tongxiang with the secretaries of provincial party committees and the heads of organization departments. It explores the effect of tongxiang guanxi on provincial state-owned enterprises' executive promotion for the first time. It finds that tongxiang guanxi has a positive impact on the promotion probability of the heads of provincial state-owned enterprises, and this positive impact is more obvious in the sample of the heads of provincial state-owned enterprises with political connections. Additionally, it uses the cut of deputy leaders as an exogenous event and tests whether there are differences in the positive effects of tongxiang guanxi with the heads of organization departments on the promotion probability of the heads of provincial state-owned enterprises before and after the cut of deputy leaders. It shows that the heads of provincial state-owned enterprises with tongxiang guanxi with the heads of organization departments have higher promotion probability after the cut of deputy leaders, further confirming the rationality of hypotheses.
Can Tongxiang Guanxi Play a Role in Executive Promotion? An Empirical Test Based on the Heads of Provincial State-owned Enterprises
Journal of Finance and Economics Vol. 43, Issue 01, pp. 17 - 28,40 (2017) DOI:10.16538/j.cnki.jfe.2017.01.002
Cite this article
Li Weian, Sun Lin. Can Tongxiang Guanxi Play a Role in Executive Promotion? An Empirical Test Based on the Heads of Provincial State-owned Enterprises[J]. Journal of Finance and Economics, 2017, 43(1): 17–28.
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