An Empirical Study Of The Impact Of CEO Financial Experience On Corporate Stock Price

As the core executives of the company,the CEO's characteristics have an important influence on the company's decision-making.Domestic and foreign scholars have confirmed that the characteristics of CEO,such as gender,age,professional experience and so on,will play an important role on company's decision-making.In recent years,as more and more companies hire executives who have financial experience as CEO,the literature about the impact of CEO financial experience on corporate decision-making is increasing day by day.Although the company's stock price is significant for the company's long-term development,there is less literature linking the relationship between CEO financial experience and the company's stock price.This paper studies the impact of CEO financial experience on the company's stock price from the perspective of China's stock market disaster in 2015.It also explores the role of equity concentration how to play,and explores the mechanism in which the CEO's financial experience affects the company's stock price.This paper takes the A-share listed company during the stock market disaster in 2015 as the research object,and uses the ordinary least squares model to study the impact of the CEO's financial experience on the company's stock price.The empirical results show that the CEO financial experience has a significant negative impact on the company's stock price,that is,the CEO's financial experience can significantly reduce the company's stock price.Further,after we divide the full sample into high equity concentration enterprises and low equity concentration enterprises according to the concentration degree of ownership,the negative effect of CEO financial experience on the company's stock price is more significant in the enterprises with high equity concentration,but is not significant in the low equity concentration group,which indicates that the concentration of ownership does not weaken the negative effect of the CEO's financial experience on the company's stock price,but enhances the negative effect,which may be caused by the collusion between the executive and the controlling shareholder.In terms of mechanism test,compared with non-financial CEOs,CEOs with financial experience have more accrued earnings management activities and more equity pledges,but CEO financial experience does not affect the company's stock price through accrued earnings management channels,but through the equity pledge channel.In terms of robustness test,this paper has carried out regression analysis by removing the control variable CEOchair_dummy and rejecting the sample of the CEO change.The results show that the negative effect of the CEO financial experience on the company's stock price still exists,that is,the conclusion is still valid.Therefore,the CEO's financial experience has a significant negative effect on the company's stock price.The concentration of equity can enhance the negative effect,and the negative effect is transmitted by the equity pledge channel.This paper helps to expand the related research about the characteristics of executives and the influencing factors of stock price,and help the investors make decision scientifically in the capital market.