Career Mobility and Performance Evaluation of China's SOE Managerial Elites

Abstract

This paper examines the career mobility and performance evaluation of the leaders of China's state-owned enterprises (SOEs) at the central, provincial and prefectural levels. Using data on executive turnover within publicly listed SOEs, we find that central and local SOE leaders have a similar career flow pattern. Specifically, vertical mobility within the same business group is common and more than 60 per cent of SOE leaders leave their office within three years. Only a minority of SOE leaders achieve political promotion. We also find that performance evaluation criteria are different across central and local SOEs. The leaders who provide better economic outcomes for central SOEs obtain a higher evaluation score, while close political connections boost the promotion prospects of local SOE leaders. Overall, our findings provide granular evidence on the personnel management of China's SOEs from a comparative perspective.