CEO With Rich Career Experience And Corporate Risk-taking

Talent plays a key role in innovation-driven development strategy in China.How to cultivate and select management talents is important to the sustainable development of enterprises and macroeconomic.China has focused on improving systems and investing resources in the introduction,cultivation and support of talents for long time.It has become an important goal of the talent strategy in the "14th Five-Year Plan" period to build a team of advanced talents.However,the current shortage and mismatch of management talents still exist in enterprises,which affects the development of the business economy.For corporate,risk-taking refers to the willingness to pursue high profits and take risks for this purposet.And reasonable risk-taking is beneficial to improve corporate value and social total factor productivity.As important human capital of a corporate,CEO is the the main role of decision-making for investment,operation,financing and other risky activities.Therefore,it is of particular concern to the practical and theoretical fields to reasonably select and allocate top managers,give full play to their innovative spirit and risk-taking consciousness to create value.In the global manager market,the diversification of managers' career experience has become an important factor in measuring "Generalists" and,Specialist".Based on the upper echelons theory,managers' career experience will affect the formation of their cognition and behavior patterns,and then affect corporate behavior.Most previous studies on managers' career experience only considered the impact of a single special career experience on the corporate behavior and economic consequences.However,multiple career experiences are particularly important in shaping managers'thinking,cognition,and abilities.The latest researches found that when making decisions,CEOs will comprehensively use the skills learned throughout their careers.Therefore,CEOs with rich career experience may have stronger strain capacity,cross-border capability,and adventurous spirit,and are more likely to be hired with higher compensation.A few studies have also verified the positive effect of CEO complex career experience on the decision-making of enterprise innovation,merger and acquisition,financing constraints,etc.However,there is almost no systematic research on the relationship between the richness of CEO's career experience and corporate risk-taking,and it has not been involved in the test of the influence path and economic consequences with corporate decision as the core.In summary,it is of certain theoretical value and practical signiflcance to explore the influence of CEO's rich career experience on corporate risk-taking from the micro level,and to explore its path of influence from the perspective of operation and finance.Based on the above practical and theoretical background,according to the logic of "index construction--impact effect--impact mechanism--influence path--economic consequences",this dissertation studies the following key questions:(1)How to measure the career experience richness of CEOs of listed companies in China,and what is the data distribution and trend?(2)Does the richness of the CEO's career experience increase the level of corporate risk-taking,and what are the mechanisms and economic consequences?Next,we will explore the influence path from two perspectives of operating risk-taking and financial risk-taking.(3)In terms of operating risk-taking,does the richness of the CEO's career experience promote the diversification of the corporate,and what are the mechanisms and economic consequences?Is diversification as an influence path for the CEO's rich career experience to enhance corporate risk-taking?(4)In terms of financial risk taking,does the richness of the CEO's career experience affect the company's debt level,and what is the context?Is debt financing as an influence path for the CEO's compound career experience to enhance corporate risk-taking?In view of the above research points,the core research content of this dissertation mainly includes the following four parts:(1)The construction and analysis of the CEO career experience richness index of Chinese listed companies.According to China's institutional background and management situation,the basic dimension of CEO career experience richness is constructed theoretically.Based on the data set of CEO career experience collected manually,factor analysis is used to calculate the CEO career experience richness index of Chinese enterprises,and the overall development trend and sample distribution of CEO career experience richness of Chinese enterprises are preliminarily analyzed.It is found that the average level of career experience richness of CEOs of listed companies in China is relatively low.Although the overall trend is increasing year by year,the change range of the median is weak.CEOs with rich career experience are scarce resources.There are significant differences in the richness of CEO career experience among the samples of corporates with different property rights,industry attributes and capital market types.(2)Research on the impact of CEO's richness of career experience on corporate risk-taking.Firstly,the two-way fixed effect model and a series of robustness tests are used to theoretically analyze and empirically test the impact of CEO with rich career experience on corporate risk-taking.Secondly,from the perspectives of risk-taking willingness and ability,the mechanism of the impact of CEO with rich career experience on enterprise risk-taking is verified.It is found that when the economic policy uncertainty is stronger and the degree of marketization is lower,the promoting effect of CEO rich career experience on corporate risk-taking is stronger.Finally,from the perspective of economic consequences,the mediating effect is used to test that CEO with rich career experience can enhance corporate value by promoting corporate risk-taking.(3)In terms of operating risk-taking,the impact of CEO's rich career experience on corporate diversification is studied.First of all,theoretical analysis and empirical test of CEO with rich career experience on the promotion of enterprise diversification.At the same time,the mediating effect test shows that the path of "CEO's career experience--corporate diversification--corporate risk-taking" is established,that is,diversified operation is one of the influence paths for CEO with rich career experience to promote corporate risk-taking.Secondly,the test results of the mechanism find that the CEO with rich career experience can improve the manager's ability and the information resources to enhance the diversified operation.Finally,the economic consequence test shows that CEOs with complex career experience can create enterprise value through diversification in the long term.(4)In terms of financial risk-taking,the impact of CEO's rich career experience on corporate capital structure is studied.Firstly,it is found that CEO with rich career experience can enhance the debt level of the company,and the career experience across enterprises,industries and organizations has the most significant effect on corporate debt.The mediating effect test shows that the path of "CEO's career experience--capital structure--enterprise risk-taking" is established,that is,the level of debt financing is one of the influence paths for CEO with rich career experience to enhance corporate risk-taking.Secondly,from the perspective of context,managerial autonomy will have a moderating effect on the performance of CEO traits.Where the CEO's shareholding ratio is higher,the corporates are non-state-owned,and the concentration of corporate equity is lower,the CEO has higher management autonomy,and the richness of the CEO's career experience has a more significant effect on the level of corporate debt.Finally,from the perspective of decision-making efficiency,it is verified that CEO with rich career experience can improve the dynamic adjustment speed of the capital structure.The above four core contents are mutually supported,and constitute a complete research context of the impact of CEO with career experience on corporate risk-taking.The contributions are as follows:(1)Based on the data set of CEO's career experience collected manually,the index of CEO's career experience richness of China's listed companies is constructed.Continuing the lasted research on generalist CEO in recent years,this dissertation innovates the index of CEO career experience richness according to the Chinese situation.On the basis of examining the CEO's cross-functional department,cross-corporate and cross-industry career experience,it is more consistent with China's institutional background to pay attention to the CEO's cross-organizational and cross-regional career experience.On the one hand,it has important reference significance for the quantification of talent traits,which enriches the research in the field of human resources.On the other hand,it provides reference for the decision-making of personnel training and introduction,resource allocation,market mechanism improvement and other aspects.(2)This dissertation verifies the important impact of CEO with rich career experience on corporate behavior,which is a beneficial supplement to the upper echelons theory,and provides new empirical evidence for relevant research on the influence of executive background characteristics on corporate behavior.Instead of focusing on CEO's single career experience,this dissertation comprehensively studies CEO with rich career experience influence on the corporate risk-taking and management decisions,from the perspective of the difference between generalist and specialist.It enriches the literature on the economic consequences of the heterogeneous characteristics of executives.(3)This dissertation expands the research on the impact of CEO at the micro level in the field of corporate behavior.Based on upper echelon theory,principal-agent theory and resource-based theory,multidisciplinary theory,it systematically studies the influence effect,influence path and economic consequences of CEO with rich career experience on corporate risk-taking,which broadens the research boundary in the field of corporate risk taking and enriches the analysis framework and research findings of the influence of the characteristics of managers' career experience on corporate risk taking.It provides new ideas for enterprises to improve the structure and selection mechanism of management team and promote the quality and efficiency of corporate operation and management decision-making.