Research On The Influence Of Director Network On Corporate Risk-Taking

Corporate risk-taking is the tendency of corporates to choose high-risk and high-return items and pay for them in the investment decision-making process,which represents the risk preference of corporates in the Investment Process.It is not only the embodiment of risk-taking attitude of decision-makers,but also an important part of"entrepreneurship".On the micro level,corporate risk-taking plays a positive role in improving corporate operating efficiency and corporate performance,promoting corporate innovation and enhancing corporate value.On the macro level,corporate risk-taking helps to accelerate the capital accumulation of society as a whole,to promote technological progress,to increase social productivity,and to achieve sustainable economic growth.Considering the importance of stimulating and protecting entrepreneurship in the academic and practical fields,and the risks and opportunities faced by corporates under the"new normal of economy",it is of great significance to deeply analyze the influencing factors of corporate risk-taking.Most of the existing studies are based on the principal-agent framework,which explores the influence of manager's personal characteristics and corporate governance mechanism on corporate risk-taking.The director network is a set of diirect and indirect connections based on the individual directors and at least one board of directors.which has the effect of resource allocation.The director network will also have an impact on the director's governance behavior.There is little research on the influence of director network on the risk-taking of corporates.And a few existing literatures only from the director network or independent director network from a single point of view,failed to distinguish the impact of different types of network differences.In view of this,this paper focuses on the informal institutional arrangement of director network,using the analysis framework of resource dependence theory,social capital theory,principal-agent theory and behavior-agent theory,analyzing the possible paths of the director network influencing the risk-taking of corporates from the two aspects of "esource effect"and"governance effect".Combining with the current independent director system in China,the particularity of independent director network is analyzed from the angle of"more resources" and"stronger governance".Using the panel data of China's A-share listed companies from 2007 to 2017.this paper calculates the intermediary centrality index of director network,independent director network and non-independent director network,and constructs the relationship model between them and corporate risk-taking.The results show that there is a positive correlation between director network and corporates risk-taking,and the positive correlation between independent director network and corporates risk-taking is more significant than that between independent director network and corporates risk-taking.On this basis,in order to explore the impact of internal and external governance environment on the role of director network,this paper discusses the moderating effect of industry competition degree and agency cost on the positive correlation between director network and corporates risk-taking in the further research.It is found that the lower the level of industry competition,and the higher the agency cost,the more effective the director network is in promoting the corporate risk-taking.In order to guarantee the robustness of the empirical results,this paper adopts a new method to calculate the core variables in the robustness test.Considering the endogeneity of variables and models,we explain variables and control variables with one lag period to solve the reverse causality problem.and adopt Heckman two-stage regression to solve the sample self-selection problem.After using the above methods,the empirical results are still robust.Therefore,the following conclusions are drawn:(1)There is a significant positive correlation between director network and corporate risk-taking,the higher the centrality of director network,the higher the level of corporate risk-taking.(2)There are significant differences between different types of director networks in promoting corporate risk-taking,and the positive correlation between independent director network and corporate risk-taking is more significant than that between non-independent director networks.(3)The lower the level of competition and the higher the agency cost,the more significant the director network is.The research of this paper may have the following three contributions:Firstly,this paper studies the influencing factors of corporate risk-taking from a new angle,and enriches the related research of director network and corporate risk-taking.Secondly,the research of this paper shows that the director network can promote the corporate risk-taking,and the independent director network can promote the corporate risk-taking more significantly.It provides some references for the listed companies to select and employ the board members reasonably according to the internal and external governance environment of the corporate and to give full play to the active role of the director network.Thirdly,this paper provides empirical evidence for policy makers to improve the system of director network,optimize the implementation effect of Director Network,and improve the level of corporate risk-taking.