The Dynamics of Capital Market Opening and Executive Turnover

Kun Du

doi:10.54097/d6pqaf17

Authors

Kun Du

DOI:

https://doi.org/10.54097/d6pqaf17

Keywords:

Capital market opening, executive turnover, corporate governance, Shanghai-Hong Kong Stock Connect

Abstract

This study uses the Shanghai-Hong Kong Stock Connect as a quasi-natural experiment to empirically examine the impact of capital market opening on executive turnover in Chinese A-share listed companies. The findings are as follows: First, capital market opening significantly increases the probability of abnormal executive changes, reflecting a direct effect. Second, firm performance and the competitive environment of the product market play significant moderating roles in this relationship, with high-performing firms and executives in highly competitive industries being more likely to experience turnover. Finally, investor sentiment, financing constraints, and the proportion of institutional ownership serve as mediators in the process by which capital market opening affects executive turnover, with institutional ownership exhibiting a full mediation effect. The results indicate that capital market opening effectively promotes the optimization of corporate governance structures by strengthening external governance pressure and influencing internal corporate decision-making.

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