The Research On Impact Of Board Capital And Strategy Decision On Firm’s Growth

In the arrangement of modern corporation system, the board plays an important role in corporate governance, the level of board governance is a deciding factor of the firm’s core competitive ability, and sustainable development. However, in the practice of corporate governance, most companies have the phenomenon of passive compliance, the board does not fully reflect its governance ability. Today, our country’s economy has achieved at a new norm, the speed of development of economy is changing, whether the company can keep sustained and stable in a turbulent environment development has become a severe test. The background put forward higher requirements for the board. In theory, though the existing research of board has achieved abundant achievements, most of them focus on the structure or the diversity of the board, these research failed to reach a unanimous conclusion, they give limited guidance for the practice of corporate governance. The board capital is considered to be the key to influence the level of corporate governance, but research on the relationship between board capital and firm growth is relatively insufficient. This paper selects the perspective of board capital, focus on the relationship between board capital and firm growth. In theory, this research can enrich the existing research of board capital and firm growth. In practice, this paper can put forward better reference for the corporate governance, through optimization of the members of the board configuration and make full use of the capital, it do has important practical significance to improve the level of board governance, and the sustained and healthy development of the companyBased on the resource dependence theory, upper echelons theory, social capital theory and firm growth theory, using normative research and empirical research method, discusses the effects of board capital, strategic decision on the growth of the firm. This paper selects 293 GEM listed firms from the year of 2012 to 2014 as the samples of empirical research. The empirical results show that the proportion of directors with output function background, occupation heterogeneity is significant positively related with the growth of the firm. There is a inverted U relationship between the directors’ membership on multiple board and the firm. Among the factors of board capital, industry experience, occupation heterogeneity, and co-working experience are positively related with the R & D expenditure and marketing expenditure, the directors’ membership on multiple board is positively related with the R&D expenditure. At the same time, this paper examines mediating role of strategic decision, the research results show that, intensity of R&D expenditure plays a partial mediating role in the relationship between occupation heterogeneity, directors’membership on multiple board and firm growth, intensity of marketing expenditure plays a partial mediating role in the relationship between occupation heterogeneity and firm growth. Based on the empirical results, we proposed to the practice of corporate governance.The innovation of this paper lies in:(1) Exploration about the effects of the invisible features of the board on firm’s growth. The study on the relationship between board capital and firm’s growth can better explain the effects of the board on firm’s growth. In addition, based on the existing research on board capital, we comprehensively considered factors of both board human capital and board social capital, and proposed comprehensive measure of board capital. (2)Introduced strategic decision as intermediary variable in the relationship between the board capital and firm’s growth. In this paper, we focus on the resource allocation role of the strategic decision, and considering the theory of firm’s growth, selecting the allocation of resources which have important influence on firm’s growth-intensity of R&D expenditure and intensity of marketing expenditure as the proxy variables of strategic decision. This can enrich the existing research on mediation, breaking the traditional "Structure-Performance" model.