Economic Policy Uncertainty,Vertical Interlocks Of Executives And Corporate Risk Taking

Risk taking reflects the choice of balance between the expected return volatility and expected risk in the investment decision.In investment,it reflects that the enterprises actively choose the opportunities with high risk but positive expected net present value,so as to maximize the wealth of shareholders and the value of enterprises.Although excessive risk taking may endanger the development of enterprises,almost all enterprises need to bear a certain extent of risk.At present,the research on the influencing factors of corporate risk taking mainly divides into two levels:macro-level and micro-level.The macro level includes monetary policies,industrial policies,financial market processes,government subsidies and so on.The micro level mainly involves company characteristics,including board size,equity nature,R&D investment,managers heterogeneity and so on.The uncertainty of macroeconomic policies affects the decision of enterprise's operation and investment.Positive uncertainty contributes to development opportunities for enterprise's investment.Negative uncertainty may lead to the failure of investment projects,which contains huge risks.This paper takes 23688 samples of A-share non-financial listed companies as the research object,empirically examines how the economic policy uncertainty affects the level of corporate risk taking,and how the vertical interlocks of executives influences the relationship between the economic policy uncertainty and corporate risk taking.The results show that:(1)The economic policy uncertainty increases the level of corporate risk taking,and "opportunity effect"plays a leading role in this process.(2)The positive effect of economic policy uncertainty on corporate risk taking is more significant in the central and western regions.(3)The positive effect of economic policy uncertainty on corporate risk taking is more significant in non-state-owned enterprises.(4)Vertical interlocks of executives weaken the positive effect of economic policy uncertainty on corporate risk taking by exerting "supervisory effect",but the effect is only significant in non-state-owned enterprises.-The enlightenment from the conclusion includes:(1)Decision makers should ensure the long-term effectiveness and stability of the new policy as far as possible,and consider the individual reaction of enterprises when conducting macro-control and policy adjustment.(2)In the process of investment decision-making,enterprises should always maintain the awareness of opportunities,effectively identify and pay full attention to high-risk investment with positive expected net present value;in particular,private companies in industries with a high degree of marketization should seize the opportunity to adopt an offensive strategy to gain greater market share.(3)For non-state-owned enterprises represented by private enterprises,moderately arranging large shareholder executives to listed companies concurrently is conducive to guiding and supervising the rational investment and steady development of enterprises.