CEO Power,Marketization Process And Corporate Risk-taking

In recent years,academia and relevant policy departments have begun to pay more and more attention to the study and research of enterprise risk-taking,and the focus of scholars' attention has a changing trend,that is,enterprise value no longer receives excessive attention,while enterprise risk becomes the focus of study,and scholars are keen to study the mechanism that affects enterprise risk-taking,especially after the 2008 financial crisis in the United States.For obvious.It has been pointed out that excessive risk-taking by enterprises is the main cause of the financial crisis in the United States.Under the modern enterprise system of separation of two powers,in the process of corporate governance,we can not ignore the ownership of power between the management and the board of directors.However,according to the power theory of management,the shortcomings of corporate governance mechanism can not be ignored,such as the inconsistency of information between shareholders and management and the concurrent chairmanship of CEO.The consequences of these shortcomings are that management,especially the CEO at the top of the hierarchical structure,controls more power,and sometimes decides the important decision-making of the enterprise completely.Because there are still many loopholes in the market mechanism of professional managers in China,which need to be improved.Controlling shareholders,chairmen and vice-chairmen are all likely to serve as CEO concurrently.Especially in state-owned enterprises,the real decision-making power of enterprises is controlled by the management,so that the CEO's power continues to grow and the voice and control power is greater than that of the board of directors.Based on these practical problems,this paper discusses the management.The relationship between power and risk-taking is conducive to the corresponding solutions.Previous literature pointed out that improving the level of risk-taking or taking risky decisions can enable enterprises to grasp good investment opportunities and pursue more economic value with better development.However,the financial crisis in the United States also tells us a cruel fact: the excessive risk-taking of enterprises not only hinders their own development,but also makes some enterprises completely collapsed and become victims of risk-taking,resulting in adverse economic impact.Furthermore,the regulations of market-oriented process on the behavior of corporate management and the restraint of corporate risk-taking have attracted extensive attention of Western scholars.Because there are great differences in political,economic and legal systems between China and Western countries such as Europe and the United States,whether these conclusions are valid in China is still unknown,and there are few relevant studies in China at present.Therefore,it is necessary to further introduce the market-oriented process on the basis of the relationship between CEO power and corporate risk-taking.Based on the above research background,this paper takes China's A-share non-financial listed companies from 2008 to 2015 as a sample,uses the method of literature analysis and empirical test,makes a tentative study on the relationship between CEO power and corporate risk-taking,and analyses the interaction between the process of marketization and CEO power on corporate risk-taking.Firstly,this paper reviews the research status at home and abroad,and summarizes the previous literature.Secondly,it summarizes the theories involved in CEO power,marketization process and enterprise risk-taking,including management power theory,principal-agent theory and behavioral decision-making theory.Secondly,it makes theoretical analysis combined with the theories involved in this paper and puts forward hypotheses based on the theoretical basis.This is the case.Finally,the hypothesis proposed in this paper is tested and analyzed empirically.Through theoretical and empirical analysis,the following conclusions are drawn:(1)there is a significant negative correlation between CEO power and corporate risk-taking in China's listed companies,that is,the greater the CEO power,the lower the level of corporate risk-taking.(2)The marketization process can significantly weaken the impact of CEO power on corporate risk-taking.(3)Corporate risk-taking can significantly enhance corporate value,while CEO power significantly inhibits the role of risk-taking in enhancing corporate value.In response to these conclusions,this paper puts forward several policy recommendations:(1)improve the internal control system of the company and strengthen the supervision of external stakeholders;(2)for policymakers,further deepen market-oriented reform and create a fully fair institutional environment;(3)business managers should effectively identify and pay full attention to those high-risk investment with positive expected net present value.Capital projects,the rational allocation of capital to high-risk high-return investment areas.