Research On The Influence Mechanism Of Manager's Reputation Embedded In Social Network

The outbreak of the gobal CEO "Reputation crisis" attracted an unprecedented attention form academics and industry in early 20th century.Taking into account the objective facts of human society and China's special corporate governance system,the theoretical framework of foreign managers cannot accurately portray domestic reputation connotation.With our society gradually shift from hierarchy to the flat system,social network is everywhere,its pros and cons impact is complex.Considering the external governance environment and basing on agents motivation theory,the paper construct a theoretical model of the embedding managerial reputation in social network from politically connected perspective.The model analyzes the formation of the manager's reputation,influence factors and mechanism of action.The paper explore the actual impact on the managerial reputation of enterprises from three aspects including the effectiveness of corporate governance,business performance and risk level by using Chinese listed company data.So the following main conclusions are below.(1)Herein by reference Tadelis(2002),considering the moral hazard of managers,the paper to build an intergenerational modelof social network embedded in the reputation mechanism.From the perspective of the formation of social network embeddedness,the paper research manager's reputation,influence factors and mechanism.The theoretical results show that:the social network bring the enterprises with many convenient condition including financing channel,information dissemination,investor confidence and market influence,etc.,and it significantly improve the probability of success.Meanwhile,the successful business record can make greater accumulation of social network.Social network and reputation formed a positive interaction situation.The reputation mechanism embedded in social network can play better incentives for businesses agents.(2)On the aspect of corporate performance.Unlike previous literature,the article use propensity score matching methods to solve the endogenous problem effectly.By using the panel data of listed companies in China between 2005--2012 years,the study found:? There are significant differences in the source of managerial reputation in different ownership enterprise,which the managerial reputation of state-owned enterprise depends on political association,and it is maintained mainly by good business results in private enterprises.?The author found that managers gain enterprise award which will result in negative abnormal returns in short term by event study;At the same time,the article found that managerial reputation can significantly improve the long-term business performance by the method of mixed regression.(3)On the aspect of corporate risk-taking.Political association of managers not only has its complicated relationship between managerial reputation,reputation also play a significant role on the corporate risk-taking.In this paper,by using the panel data of main board listed company,we study the influence of managerial reputation on the level and structure of corporate risk.The main conclusions are:?The managerial reputation has a significant lowering effect on the enterprise risk level.?When considering the enterprise risk structure,managerial reputation reduce the overall risk by reducing the non-systemic risks.The increase systemic risk part,Despit the fact that systemic risk is increased,we can improve the market value of enterprises through a combination of hedging market.It does good to optimize the risk structure of the enterprise.?The study found a significant intermediary effect of political connectness between an association of managerial reputation between enterpriserisk risk-taking by using intermediaries effects model.Finally,considering the level of development of market economy and the process of regional economic development,the empirical results found that reputation incentives act to lower business risk action levels only in developed market economies,a higher level of economic development of the region.(4)On the aspect of the effectiveness of corporate governance.In this paper,we use the panel data of main board listed company between 2005—2014.The article studies the manager's reputation on corporate governance effectiveness from the four aspects including business investment decisions,financing decisions,corporate irregularities and the managerial turnover.The regression resulta by using panel Logit model and the mediating effect model are below:?Managerial reputation can significantly reduce the efficiency of investment.In other words,the managerial reputation can significantly curb excessive investment in private enterprises,and there does't exsit a significant relationship between managerial reputation with the over-investment in state-owned enterprise.?The presence of managerial reputation in state-owned enterprises and private enterprises has very different performance.The managerial reputation of private enterprises will significantly increase the likelihood of the occurrence of violations,the significant relationship between the managerial reputation of state-owned enterprise and corporate irregularities does not exist.?When the corporate violations inspection were processed,the managers with high reputation are more likely to build managerial position defense.?The social network plays a significant regulatory role in the impact of manager's reputation on the effectiveness of corporate governance.Based on the theoretical and empirical results,this paper obtained the following policy implications:?We suggerst that the government should carry out the relevant regulations of professional managers as soon as possible and provide an institutional guarantee for the market of professional managers.?The government should promote market-oriented reform of state-owned enterprises further and reduce government administrative intervention(especially executive appointments and compensation control).It will gradually form a market-oriented Incentives basing on corporate performance and which will greatly reduce moral hazard and the abuse of power.?It suggests that establishing risk-oriented management compensation appraisal system can unity in the interests of management and shareholders on corporate risk-taking.? In order to build a good corporate governance external environment,the government need to improve the legal infrastructure and supporting facilities and strengthen the social credit system construction.