A Study On Vertical Interlocks Of Executives And Corporate Risk-taking

In recent years,some state-owned enterprises have undergone restructuring and mergers with the support of the government,which has complicated the relationship between the attributes and control rights of enterprises.The complicated control relationship has aggravated the problem of internal controllers to a certain extent.In order to strengthen the control of the subsidiaries,the major shareholders will choose to let the directors and senior executives of the group also serve as directors and executives in the subsidiaries."Vertically concurrently serving as an executive." According to the existing statistics,large shareholders generally use vertical and concurrent executives to strengthen the control of listed companies.About 41.8% of the listed companies in China have executives who also serve in enterprises with control relationships.situation.As a decision-making behavior orientation,risk-taking represents the tendency of management to pursue high profits and is willing to pay for it.It pays attention to the realization of long-term value of enterprises,but the risk-taking decisions of enterprises are not always based on shareholders' expectations.With regard to risk-taking,there is insufficient research on the situation of managers of listed companies in China and the risk-taking of enterprises.As the makers of corporate strategies and decision makers of major issues,senior management directly determines the level of corporate risk-taking.The vertical and concurrent background characteristics of senior executives will affect the risk orientation of decision-making and further affect corporate value.Therefore,based on the principal-agent theory,the high-level echelon theory and the resource absorption and sharing theory,this paper takes the vertical concurrent executives as the core,and from the perspective of enterprise risk-taking,explores the impact of the vertical concurrent executives on enterprise investment risk preference,and further studies the nature of property rights(internal)and institutional environment(External).Whether the impact of vertical concurrent executives on corporate risk-taking is different under the influence of these two factors.This paper puts forward three hypotheses and collects relevant financial data of A-share listed companies in Shanghai and Shenzhen from 2008 to 2016.The data are matched and screened by Excel software,and a total of 10284 sets of sample data are finally obtained.Stata software is used for empirical analysis.The concrete conclusions are as follows:Firstly,enterprises with serious agency problems are more likely to suffer from insufficient investment.As a way of supervision by major shareholders,the vertical concurrent appointment of senior managers can reduce agency costs.To a certain extent,management and shareholders are in line with the trend of interests,which optimizes the decision-making process and execution efficiency of enterprises;and the vertical concurrent appointment of senior managers is high.As a vertical connection between enterprises,management provides a platform for resource circulation among enterprises,and enterprises can obtain more resources for project investment.Therefore,the existence of vertical concurrent executives of enterprises,strengthen the supervision of management,ease the conflict of interests between management and shareholders,and can provide more external resources to improve the level of risk-taking.Secondly,the agency problem and resource encroachment of state-owned enterprises are more serious,and the positive effect of vertical concurrent executives on enterprise risk-taking level is more significant in state-owned enterprises.Thirdly,institutional environment and vertical concurrent executives have an alternative effect on the risk-taking level of state-owned enterprises.Compared with the areas with perfect institutional environment,the state-owned listed companies located in the areas with poor institutional environment lack the corresponding external supervision mechanism,and the vertical concurrent executives as internal supervision play a more significant role in improving the risk-taking level of state-owned enterprises.This paper studies the phenomenon of vertical concurrent executives,discusses its impact on the level of risk-taking of enterprises and enterprises from different perspectives,and based on theoretical analysis and empirical test results,combines the characteristics of China's capital market and corporate governance system,puts forward relevant policy recommendations.The content of this paper is helpful for enterprises to improve corporate governance system,and for the government,it provides a basis for relevant departments to formulate policies to strengthen capital market supervision,maintain market order and protect the interests of investors.