Study On The Background Characteristic’s Influence On The Investment And Performance Of The Enterprise

Chairman of the Board, who holds the most important investment decision-making power for the enterprise, has a decisive role in enterprise management and long-term development. The majority of scholars focuse on the investment behavior of the managers for a long time, and made a series of research results, the traditional theories, such as principal-agent theory, asymmetric information theory has made great contributions in the study of this problem. However, with the deepening of the study, some researchers found that the over-investment, insufficient investment and investment myopia exist in enterprises in almost every country. But the traditional theory can’t explain this investment appearance. Therefore, some scholars have related knowledge of demography and psychology into the field of management, and tried to build a new theory from the perspective of management behavior. Then finally the article produced an influential theory, which is called "high-rise echelon theory".According to the demographic and psychological theory, the demographic characteristic has an important influence on the behavior of human. For managers, different background characteristics are likely to lead to differences on investment behavior, and thus have a greater impact on business performance. On one hand, the existing research focus on the background characteristics of top management team, different background characteristics give rise to the managers of the different enterprise investment. On the other hand, some other study focused on the relationship between management background characteristics and organizational performance. However, it is still an unanswered question that the different enterprise investment behavior with different background managers whether has influence on the performance of enterprises.In this paper, combined with our corporate governance structure of the reality, we put the chairman of background characteristics, corporate investment and enterprise performance into an analytical framework. And then we firstly verify how the background characteristics influence on the effect of investment. Secondly, we research whether the chairman background characteristics can pass through the corporate investment effect on the enterprise performance and how much the degree of effect between these variables above and the enterprise performance is. First of all, the article review the content related to the upper echelon theory and social capital theory, the basic idea of upper echelon theory is the starting point in this paper, the entrepreneur social capital theory provides a reliable theoretical tool and a new perspective to explore the impact of background characteristics on corporate investment and firm performance on China’s unique culture. Secondly, according to the empirical studies at home and abroad about basic theory and the empirical research, we establish the framework and ideas of the research that the chairman background characteristics impact on investment and the chairman of background characteristics impact on corporate performance and corporate investment could be as a moderating variable study.then constructs the theoretical model of this study. What’s more, the paper puts forward the research hypothesis. Finally, according to the the1021collected data from the stock listing Corporation from2007to2011, we complete on the empirical descriptive statistics, correlation analysis and finish the empirical test about the research hypothesis by SPSS20.0software. It should be pointed out that, the background characteristic data is obtained according to the CSMAR database, listing Corporation website, company annual reports and Sina Financial Network to provide executive resume manual coding. By the way, the rest of the data is from the CCER database.The study found that there is a negative effect of age, education and tenure of chairman of the background to the enterprise investment scale. In addition, other background characteristics influence on the enterprise investment is not significant. If the chairman of the enterprise is the male sex, the enterprise performance is lower; the term is longer, the more corporate performance would better. Moreover, the study also found that, business investment can do some effect on the relationship between age and firm performance, he relationship between the executive experience and firm performance can also produce a certain difference.This study is based on the upper echelon theory and related method of social capital theory. And the conclusions not only enrich and develop the research results of upper echelon theory, but also expand the upper echelon theory in space applications. Furthermore, it has enriched the literature about manager’s background characteristics and enterprise investment. After all, the conclusion of the study is also helpful to the selection of the senior managers such as corporation chairman, enterprise managers.