Management Ownership, Institutional Environment And Private Enterprise Risk Research

With the development of the economic transformation in China, private enterprises have become an important part of China’s economic development.But a large number of small and medium-sized private enterprises still face the problem that they can’t survive longer.Private enterprises play an important role in solving the employment in our country, and creating the gross domestic product (GDP).The author thinks that the development of the private enterprises need not only their own internal governance, at the same time also need good proper external system environment. Some scholars have studied the relationship between enterprise governance and enterprise performance, and good governance can improve the performance of enterprises. They should be good at optimizing enterprise internal management and integration of external resources to develop in the fierce competition environment.Nowadays, the government’s control and disposition of economic resources to a certain extent can harm the free development of private enterprises, and institutional discrimination and design flaws make laws and regulations on the protection of the private enterprise is not in place.Enterprise risk-taking behavior is a high-risk behavior, and it plays an important role for enterprise survival and development. It is one of the most basic elements of the long-term economic growth in the pursuit of profit opportunities. Some studies suggest that higher risk-taking behavior means that the enterprise can choose high risk project and the net present value greater than zero. This requires enterprise needs high investment, the introduction of new technology and talent. There are many factors that can influence enterprise risk-taking behavior. Learning from prior study of many scholars, this article points that the management system of ownership and environment are two major factors to study its relationship with the risk exposure. According to the content of the principal-agent theory, enterprise managers and the interests of the owner have a conflict that the ultimate goal of the owners in an enterprise is the enterprise benefit maximization, and enterprise managers tend to be based on the maximization of enterprise resources to meet their interests. So facing of the high-risk investment projects, managers are generally risk-averse and they don’t want to spend time and effort to learn new technology and new project management. But the owner of the enterprise wants to accept the relatively high risk project, because the high risk project can bring high returns. The institutional environment in this papermainly refers to the macroscopic system environment. The influence of the macroeconomic environment for enterprise future development is very important, especially private enterprises. They are influenced by the external system environment is very big. Especially in the process of the transformation of the economic development of our country, private enterprises should seize the opportunity, to promotes the development of enterprises. The CPC central committee also makes clear the relationship between the government and market and points that market plays a decisive role in the allocation of resourcesthat at the Third Plenary Session of18th. Through the empirical analysis this article found that the government intervention in the enterprise, will affect the enterprise’s risk bearing ability, and it is not conducive to the improvement of enterprise’s innovation ability and the development of the future.This paper has seven chapters. The first chapter is the introduction section. It mainly elaborates the research background and research significance of this article. The second chapter literature review part. It summarizes and draws lessons from past to this topic research, theoretical research basis for this article. The third chapter, four, five is the empirical part. Through the scholars put forward the point of view before summary. The author puts forward his own theoretical assumptions. Managers shareholding and private enterprise risk bearing are related, and institutional environment and private enterprise risk exposures are related. This article selects the295listed private enterprises in2003-2012decade data empirically. Through study the article comes to following conclusions:first, managers shareholding and private enterprise risks are positively correlated, and implement equity incentive for managers can improve business risks. Second, the institutional environment and risk bearing are positively correlated, private enterprises in good institutional environment, and government reduce the excessive intervention to the enterprise. Private enterprise is free to run, and business enterprise risk exposure levels. Third, the management system of ownership and the interaction effect of environment risk bearing is negatively related with private enterprise. And in the improvement of private enterprise risk bearing, managers shareholding and there is a trade-off between the institutional environment.In addition this paper also studied the relationship between enterprise risk bearing level and enterprise performance, and studies have shown that risk bearing level is inverted u-shaped relationship with corporate performance. In a certain range, improve the level of risk exposures to enterprise performance level of the enterprise.