The Effects Of Core Managers' Characteristics On Financial Flexibility

Financial flexibility concept originated from the capital structure, because the initial research mostly assumed that capital market was perfect.That means enterprise owns perfect elasticity and without any cost the enterprise can adjust capital structure to meet the demands of its capital, so financial flexibility did not cause the attention of researchers at that time. Until the outbreak of financial crisis in 2008, correlative researcher found that under the uncertain market environment, the financial flexibility that the ability of enterprises to respond to the financial crisis and investment opportunities in the financial crisis is particularly important.and an empirical study results show that before the crisis enterprises with lower financial leverage and keeping higher cash reserves are not only more likely to get rid of the financial distress, but also has greater initiative to crab the investment opportunities in the crisis Arslanetal (2008) So since 2008 the research of financial flexibility has been the focus of attention of scholars all over the world..And in early 1984 Hambrick and Mason put forward the famous upper echelons theory.The theory points out that in the complicated and changeable internal and external environment, managers often have different cognitive ability, perception ability and according to their own cognitive basis and value they predict, collect, analyze information, make decisions, and that will influence the enterprise performance.So after that many related researches are carried out by researchers using demographic characteristics such as education, working time, age and sex characteristics, but most studies have just focused on the relationship between executive background characteristics and earnings quality, accounting conservatism, company performance, few analysis focused on the relationship between managers'background characteristics and financial flexibility.Therefore, this paper studies the impact of the financial flexibility from the perspective of the background characteristics of the core management in order to polish up the financial flexibility of the research framework and based on literature review, theoretical analysis, this paper selects listing corporations' data from 2009 to 2014 for empirical research, we found that:(1) Different types of enterprises have different financial flexibility and the differences between the two core executives background characteristics (including the executives average degree, average working time, average age and so on) are significant; (2) In the control of the enterprise scale, growth and other relevant variables, the average age of core executives was positively related to financial flexibility and the average academic was negatively correlated to financial flexibility; (3) In non state owned enterprises, a significant positive correlation between the proportion of male executives and financial flexibility has been found, but this correlation is not significant among state owned enterprises.So, this paper reviews and sets up on the basis of relevant research, to corporate financial flexibility as the research object, explores the relationship between the enterprise core executives all background characteristics and financial flexibility.This for us to have a better understanding of the financial flexibility of connotation and high tube team construction has a very important theoretical and practical significance, which not only helps us to better explain the investment and financing behavior of reality company executives in but also will be helpful to the managers selection of enterprises.