【公开学术报告】The Performance Effects of Outside CEOs in Globalizing Chinese Firms

Market Characteristics, Legitimacy, and Political Embeddedness

Date & Time: 13:30-15:00 pm, Mon. 18^th, November 2019

Venue: Room 2101, Tongji Building A

Language: English

Speaker：Dr. Dongdong HUANG 黄冬东Nanyang Technological University (NTU)

ABSTRACT

I draw inspiration from the legitimacy perspective and political embeddedness theory to examine the effects of outside chief executive officers (CEOs) in globalizing Chinese firms on firm performance. Specifically, I argue that the fast-changing and turbulent market environment for globalizing firms from emerging markets will amplify the adaptive capability of outside CEOs and reduce the costs of organizational disruption that they may bring. Hence, outside CEO succession will bring positive effects for the performance of globalizing Chinese firms. Moreover, such positive effects will be stronger in central state-owned enterprises (SOEs) due to their greater improved legitimacy perceived by stakeholders in host countries. In addition, the performance effects of outside CEOs will be even more positive in central SOEs with a Party Secretary that have work experience in both the government and industrial sectors, who helps outside CEOs better embedded in the home country political system. However, outside CEOs’ performance effects will less positive when there is a strong presence of Party Secretaries on the board of directors, which leads to over-embeddedness problems. I test my hypotheses using a sample of 251 globalizing Chinese firms listed on the Shanghai and Shenzhen stock exchanges. The results offer strong support for my arguments. The results point to the importance of alignment among CEO origin, market characteristics, legitimacy in host countries, and political embeddedness within the home country government for firm performance.

KEY WORDS: outside CEO succession, globalizing firms, emerging markets, Party Secretary, legitimacy perspective, political embeddedness theory