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| Founder’s Turnover and Its Effects on Firm Growth: Evidence from Chinese Listed Firms |
| HE Xiaogang,ZHANG Yuanfei,MEI Lin |
| 1.Shanghai University of Finance and Economics， Shanghai， China;
2. School of Zhejiang, Shanghai University of Finance and Economics, Jinhua, Zhejiang, China;
3.Zhejiang Gongshang University, Hangzhou, China |
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Abstract This paper empirically exams the relationship between the turnover of founder and firm performance. By analyzing the panel data of listed companies in China from 2001 to 2007, we make the following conclusions. First, the phenomenon of turnover of founder is not common until now; the event of founder’s turnover does not happen in most of companies. Second, the event of turnover of founder includes two main types: founder departs but other top managers stay and both founder and top managers depart, no matter which situation happens, it will have significant negative effect on firm performance, but this effect was mostly reflected on the following year of the turnover happens. Third, when founder stays in the firm but other top managers departs, this turnover type does not decrease firm performance, but increases the firm value. These results indicate that, the founder plays an irreplaceable role during the firm operation. Scapegoatism happens in the process of the turnover is a kind of benevolent action to protect founder himself.
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Received: 05 June 2012
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2013, Vol. 10 
