Abstract: Based on the personnel appointment and removal announcements disclosed by the State-owned Assets Supervision and Administration Commission of the State Council, this paper arranges manually the database of senior management appointments and removals of the central enterprise groups from 2009 to 2019 and takes the listed companies controlled by the central enterprise groups (referred to as“holding companies”) as the research objects to examine the impact of the executive changes of the central enterprise groups on the investment efficiency of the holding companies. The findings show that the executive changes in the central enterprise groups will significantly improve the investment efficiency of the holding companies by restraining excessive investment behaviors, and that this enhancing effect is more pronounced in the central enterprise groups where the types of executive job changes are promotions and demotions. The result of the mechanism test reveals that the executive changes in the central enterprise groups will optimize the investment decisions of the holding companies mainly by exerting a deterrent effect to weaken the agency incentives and an incentive effect to strengthen the internal supervision. Further study finds out that the deterrent and incentive effects of the executive changes in the central enterprise groups are more pronounced in the cases of higher industrial competition in the holding company, greater executive power and lower shareholding proportions of the central enterprise groups.

Key words: executive changes of the central enterprise groups, parent-subsidiary corporation governance, investment efficiency, deterrence effect, incentive effect