ABSTRACT
Using 2012–2019 Chinese stock market data, this study examined the impact of corporate site visits (CSVs) on senior executive forced turnover. We found that the number of CSVs is negatively associated with the probability of senior executive forced turnover. For more investor participants and more questions asked during CSVs, senior executive forced turnovers are less likely to occur. Institutional investors have a more significant impact on senior executive forced turnover. This effect is dominated by the non-state-owned enterprises or companies with poor performance, high asset tangibility, and weak insider power. The results can guide policymakers who regulate investor relations and informal corporate governance.
Disclosure Statement
No potential conflict of interest was reported by the author(s).
Notes
1. Public/private funds, securities companies (research), securities companies (asset management), securities companies (stock investment), insurance companies, trust companies, QFII, financial asset management companies, non-financial companies, social security funds, and so on.
2. The coefficient of Flight is negative, which is contrary to the theoretical prediction. This is because two IVs, City and Flight, are highly correlated with a correlation coefficient more than (-)0.8. If we use Flight or City solely as an IV, then their corresponding coefficient is consistent to the theoretical prediction. For instrument variables, correlation among instruments is not a problem per se. The more correlated they are, the less powerful they become as the extra information provided by the second instrument decreases. However, these two instruments combined still contain more information than any of the individual instruments on their own. Therefore, we prefer keeping these two instrumental variables.