Using a sample of firms listed in China's A-share stock market, this study investigates whether the regional institutions and CEO's political connectedness will affect the listed firms' hiring and firing decisions about CEOs, and what are the channels of these effects. I find that, for state-owned enterprises, politically connected CEOs are less likely to be nominated to firms in industries with more specific knowledge, with more competition, cross-listed in Hong Kong stock exchange, and in regions with stronger institutions. However, there is no such pattern for non-SOEs. Second, as a consequence, CEOs' political connectedness of CEOs in SOEs reduces the sensitivity of their turnover to firm performance for SOEs. There is no such political connectedness effect on CEO turnover-performance sensitivity in non-SOEs. Third, the reduction on turnover performance sensitivity is mitigated by stronger institutions. The additional analysis finds evidence partially explaining why the politically connected CEOs are less likely to be dismissed because of their poor performance, that is, SOEs with politically connected CEOs can (1) get more subsidies from the governments when their performance is poor, and (2) tend to hire more employees when the regions in which they locate suffer from severe unemployment problem. / Yuan, Qingbo. / Adviser: T.J. Wong. / Source: Dissertation Abstracts International, Volume: 70-06, Section: A, page: 2123. / Thesis (Ph.D.)--Chinese University of Hong Kong, 2008. / Includes bibliographical references (leaves 53-57). / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. [Ann Arbor, MI] : ProQuest Information and Learning, [200-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Abstracts in English and Chinese. / School code: 1307.

China’s investments in R&D are forecast to surpass those of the US in 2022, thereby attracting capital, innovation and a large number of returnee managers. In the past eight years alone, the number of returnees has increased five-fold, with the country’s high-tech parks, particularly Beijing’s Z-Park, also known as China’s Silicon Valley or the Silicon Valley of the East, proving considerable attractions. In this context, in which start-ups are vital for economic growth and for the further development of Chinese investments in leading-edge innovation, understanding how the significant cultural differences between returnee and local managers affect management control systems (MCS) is of key importance. Drawing on a survey of more than 200 companies and data from 435 one-to-one interviews, this study investigates the relationship between CEO characteristics, government financial support and MCS sophistication in the context of fast-growing high-tech enterprises in China’s Silicon Valley. The study develops an MCS sophistication index as an aggregate measure of six main factors (the importance of MCS to the firm, system structure, system operations, system completeness, frequency of use and the level of data aggregation), and measures MCS sophistication by 46 individual management control subsystems. The study predicts and verifies a positive relationship between CEO and firm international exposure and between CEO education and the level of MCS sophistication. It also predicts and verifies a positive relationship between government financial support and MCS sophistication in a context in which privately held and managed venture capital and banks provide such support. The study further analyses the interaction effect of government financial support and CEO characteristics on MCS sophistication. Its empirical findings suggest that, despite their cultural differences, neither local nor returnee managers feel the need for better MCS. Only when there is potential access to government funding do returnee managers have better tools to implement more sophisticated MCS than their local counterparts, thus underlining how international work experience provides Chinese managers with the tools, but not the mindset, for superior MCS. Most previous studies focus on listed companies in China, whereas this study constitutes one of the first to focus on start-ups using an extensive array of data. It also contributes to the definition of a more systematic MCS sophistication measure, thus allowing more complete analysis of MCS at the firm level. Improving upon previous studies, the research reported herein also encompasses a large set of CEO characteristics to analyse their interaction with government financial support, thereby contributing to a better understanding of MCS in a key area of China’s future development. / published_or_final_version / Economics and Finance / Doctoral / Doctor of Philosophy