Military Experience Of Senior Executives And Enterprise's Inefficient Investment

In the context of disarmament in China,a number of outstanding military entrepreneurs have appeared in the public.The early experience in army has shaped their unique values and personality traits,which have continuity with their character characteristics.Therefore,their unique "military temperament" will definitely influence the behavior and decision-making of the enterprise they work for.When it comes to soldiers,what impresses people the most is their selfless dedication,pioneering spirit and disciplined style.On the other hand,military training and combat experience led to aggression,preference for risk,a belief in their ability to handle risk and greater confidence in decision-making.On the basis of the above,some scholars have looked for the relationship between military executives and financing decisions,corporate mergers and acquisitions,and managers' private earnings,but so far,no research has explored the relationship between senior executives' military experience and the investment efficiency of enterprises.Investment activities can create more opportunities for enterprises to obtain more cash flow,and realize the value increase of enterprises,which is the basis for the survival and development of enterprises.Therefore,investment efficiency not only affects the sustainable development of enterprises,but also is an important factor related to a country's economic prosperity.However,in actual production and operation,various internal and external factors,enterprises often appear inefficient investment.Will the unique characteristics of their military career influence their investment decisions? Will it have an impact on enterprises' inefficient investment? Based on the above analysis,this paper takes military executives as the entry point to explore the relationship between the military experience of senior executives and enterprises' non-efficiency investment.Taking A-share listed companies from 2006 to 2016 as the object,this paper empirically examines the relationship between military experience of managers and enterprises' non-efficiency investment,and studies the difference between managers' military experience and non-efficiency investment of different enterprises from the perspective of the property right,board structure and free cash flow.The results show that there is no significant relationship between military experience and over-investment.However,it has a significant negative correlation with insufficient investment.And this relationship is more significant in state-owned enterprises,two-in-one enterprises and enterprises with high free cash flow group.Through further tests,it was found that senior executives' military experience was significantly negatively correlated with overall inefficient investment.Finally,it was found that senior executives' military experience alleviated enterprises' inefficient investment on the whole by reducing agency cost(this mechanism).Based on the results,this paper believes that the characteristics of good risk and more confidence brought by military experience can alleviate the lack of investment caused by risk aversion of enterprises.However,when excessive investment occurs,senior executives with military experience will no longer increase investment blindly.At this time,they will be affected by the core values of military personnel,weigh the benefits of investment for enterprises,and their risk-taking characteristics will be somewhat restrained.Taken together,executives with military experience can alleviate under-investment but do not exacerbate over-investment.Therefore,military executives will be affected by the values of their predecessors and later generations,weigh the interests of enterprises more and reduce the agency problem between managers and owners,so as to improve the overall non-efficiency investment problem of enterprises and have a positive impact on the governance of non-efficiency investment.Different from previous studies on military executives and corporate behaviors,this paper finds that the influence of military career on the character of veterans is not selective in a single aspect,but comprehensive.Integrity,honesty,lofty values,willingness to devote and preference of risk,decision-making self-confidence coexist.The influence of the personality characteristics of military executives on enterprise behaviors will vary according to their environments.The contribution of this paper lies in: in theory,the article can help us from a new perspective to understand the efficiency of investment behavior,It also provides ideas for the academic circles of our country to continuously improve the research on inefficient investment of enterprises,and provides evidence for further enriching the application of the Upper Echelons Theory in China.From the perspective of reality,it can provide reference for the operation and management of current military executives,so that they can reasonably and effectively develop their own good personality,while avoiding some personality that may cause operational risks.It also provides reference opinions for the selection,decision-making and supervision of senior executives of enterprises with different property rights,different board structure and different levels of free cash flow,so as to optimize enterprise management.