Regional Risk Preference And Corporate Risk Taking

In recent years,scholars have increasingly attached importance to the influence of informal institutional factors such as cultural environment and customs on corporate behavioral decisions.As an important dimension of regional cultural customs,regional risk preference will profoundly influence the behavioral decisions of local enterprises and individuals.For example,the Confucian culture"harmony"emphasizes collecti-vism,promotes individuals to avoid risks,avoids the expression of independence,and creates modest gentlemen;while the spirit of enterprising in business culture promotes people to enhance risk tolerance,pursue high-risk and high-return,and achieves the reputation of Shanxi,Huizhou and Zhejiang merchants.However,there are many shortcomings in the study of the impact of regional risk preference on corporate risk-taking.First,most domestic research in related fields takes traditional culture or religious culture as the entry point,attributing the impact of traditional culture and religion on corporate decision-making to risk preference,which ignores the multi-dimensional characteristics of culture.A few documents that take the multi-dimensional influence of culture into account also lack effective methods to accurately capture regional risk preferences.Secondly,foreign related research distinguishes the risk preference dimension,but is limited to the country.It is insufficient to describe the regional risk preference at the meso level.This also makes it difficult to expand and deepen the research from this perspective.Starting with insurance consumption in different regions,this paper captures and extracts proxy variables to measure the level of regional risk preference,and on this basis,explores the impact of regional risk preference on enterprise risk-taking behavior,and explores its possible impact mechanism.The results show that:(1)Regional risk preference shows a strong consistency in corporate risk-taking,that is,in areas with higher risk aversion,corporate investment and financing behavior is more conservative and risk-taking level is lower,which is manifested in higher cash holding level,more cautious leverage use and lower willingness and intensity of r&d investment.(2)Further research finds that the impact of regional risk preference on corporate cash holdings is more evident in private enterprises and high market-oriented areas,while the impact on r&d investment is more profound in state-owned enterprises and low market-oriented areas.In addition,the impact of regional risk preference on financial leverage is more significant in private enterprises,but there is no significant difference in different market-oriented areas.(3)Finally,regional risk aversion will help enterprises to make more prudent investment and financing decisions by restraining chairman's overconfidence and corporate dual-role behavior,and reduce corporate risk-taking.This paper provides a new perspective and evidence for the study and explanation of the increasingly obvious regional characteristics of corporate behavior in China.