Study On Relationship Between Cultural Background Of Chinese Senior Executive And Conservative Trend Of Enterprise Investment

Culture, as the reflection of material and spirit results of human, has always been the inner power of the development of a nation. It influences the history and has a deep relation with economy. The interaction between culture and economy could be seen through the creation and development of any of the industries today. Enterprise, as the most important participant in the game of economy, has no doubt been deeply influenced by culture. Till now, economists and scholars have been trying to uncover the inner mechanism of how culture would influence the management as well as the outcome of enterprises. If this puzzle can be solved, we could find a new way to explain the useful method of managing a company by introducing culture into possible model to help managers and board of directors in their work.1. Background and PurposeSo far, there are some essays discussing issues concerning culture, but most of them discuss the issues by using data of country-level using the theory of Hofstede’s culture dimensions.And in micro perspective, some essays discussed the relationship between culture and enterprise’s outcome as well as senior executive’s attitude towards risk. As we can see, and the study on relationship between culture and enterprises goes deeper, they are divided into many fields to help understanding the truth better. So in this paper, the author focus on the issue in our country, trying to discuss how culture influence the investment trend of enterprises. As culture could not easily be quantitated, this paper referred to relevant literatures and determined to choose culture background of senior executives (such as CEO and chairman of the board of directors) to represent the visualization of culture in company. The variable that be interpreted is the conservative trend of investment behavior of enterprises. By introducing proper domain view from leadership behavior theory, top echelon theory, this paper analyses the relationship between Chinese cultural background factors of senior executives in a company and the conservative trend of its investment behavior, trying to find a new way or study direction concerning enterprise outcome and to uncover the role of culture in company management.2. View and ContentThe Chinese cultural background factors are divided into two kinds in this paper:national cultural background factors(in the longitudinal way) and social cultural background factors(in the transverse way). This two parts of cultural background factors influenced senior executives’behavior and judgment in two different ways:the former is the deposit of the long civilization history of China, it influences senior executive’s behavior and judgment by forming senior executives’ cultural factor characteristics first and then these characteristics would influence senior executive’s thoughts and ideas in managing, thus influence their behavior and judgment; the latter is changeful and polybasic, thus it cannot form the inner characteristics of senior executives.Instead, it influences senior executive’s behavior and judgment by immediately adjust senior executives’ ideas on judgment and their behavior. Both of these two kinds of cultural background factors can influence enterprise’s conservative investment trend by influence senior executives’s behavior and judgment. But some of the factors has contrary influence on investment trend and would adjust conservative trend on investment.This paper is divided into six parts.Chapter one is an introduction to the constructure of the whole paper including study background, purpose of study, thinking framework of study and pre-expectation of contribution.This part mainly discusses what would be study in this paper, what is the purpose, how to discuss and what contribution would be made in this paper.Chapter two is literature review. As the literatures discussing this issue is not so many, this part would review related literatures which discuss issues come up in this paper including theory basis, relationship between culture and enterprises, senior management executives’s background and investment behavior of enterprises. The first part would review literatures concerning theory basis in this paper, because the theory basis is the base and beginning of derivation of this paper. Then literatures about relationship between culture and enterprise would be reviewed as it is in the same field of issue discussed in this paper. Senior management executives’s background and investment behavior of enterprises are immediately related to issues discussed in this paper. Reviewing them would help us knowing better about the situation of study in this field.Chapter three is the core part of this paper which introduce the theory basis and analyses the derivation of the relationship of variables based on theories. It is divided into four parts to discuss the whole logic of this paper. The first part is analysis of theory basis:culture concept of optimum domain, Hofstede’s culture dimensions and top echelon theory. This three theory are the basis of logic derivation of this paper. Then, the second and third parts discusses the cultural background factors. The second parts discusses the national cultural background factors in three sections:the national cultural background factors that influence senior executives, characteristics of senior executives formed from these factors, and how they influence senior executives’ behavior and judgment. The third parts discussed the social cultural background factors in two sections:the social cultural background factors that influence senior executives, and how they influence senior executives’behavior and judgment. The last part discusses conservative trend of enterprise’s investment by definition, performance and how would senior executives’ behavior and judgment influence this trend.Chapter four introduces how the empirical study would be conduct, including four parts:the six hypotheses, explanation of variables, choice of sample, and model construction.Chapter five is the main body of empirical study which would conduct the study following the models built in chapter four. And then it analyses the outcome of regression separately on different models. Besides regression outcome of state-owned enterprises (soes) and non-state-owned enterprises are compared in this part.Robustness testing would also be conducted in this part.The last chapter is the conclusion of this paper and advices for study as well as practice in the future.3.Main ContributionInterdisciplinary research is conducted in this paper. It tried to combine theories in leadership behavior and financial management to explain the role of culture in the relation ship between managers and investment behavior. It is a new try in study, this paper also uses interdisciplinary research to study relationship between senior executives’s cultural background and conservative trend of enterprises’ investment.One of the contributions in this paper is to quantitate cultural background factors and divide cultural background factors in two kinds.The other contribution is by analyzing theories and derivation getting the conclusion that Chinese enterprises has the conservative trend in investment, but at the same time, some factors have opposite influence. There are also some defects in this paper, as this is a new try in study, there are not enough literature to refer to, so surly there some defects in theory derivation and empirical analysis. These are expected to improve in later studies. All in all, although there expected to be lots of difficulty, the author is happy to have a try in order to provide a reference to studies and practice in the future.