Abstract: Based on human capital theory and the principal-agent theory, the paper uses propensity score matching (PSM), to analyze the impact of employing external managers on future performance and the role of executive stock ownership on the relationship between them in the process of changing managers. Research shows that the external managers have a positive effect on enterprise performance, the promotive effect on the future performance of state owned enterprises is more significant and executives shareholding negatively regulates the positive impact of external managers on firm′s future performance. These results show that deepening the reform of the mixed ownership of state-owned enterprises to implement the system of professional managers is the important path to enhance the operation performance of state-owned enterprises.

Key words: managers, external succession, state-owned enterprises, executive stock ownership, propensity score matching method