An Empirical Study On Financial Connection And Corporate Risk-taking Of Listed Companies

In recent years,Chinese listed companies have actively established equity connection or personnel linkage with financial institutions,which has alleviated corporate financing constraints and promoted business diversification to a certain extent.However,whether these connections have increased the corporate risk-taking and caused the deviation from real economy has become a hot topic both in academia and practice field.This paper discusses in depth the relationship between different methods of financial connection and risk-taking of listed companies,which has strong practical significance for comprehensive and objective evaluation of their impact.Based on Investment Decision Theory,Financing Constraint Theory,Upper Echelons Theory and Imprinting Theory,this paper analyzes the sample data of A-share listed nonfinancial companies from 2007 to 2018 with panel regression to systematically test the impact of two types of financial connection,holding financial institutions and hiring executives with financial background,on corporate risk-taking.There are the following conclusions:(1)the employment of executives with financial background can promote corporate risk-taking,while the equity connection especially holding banks inhibits corporate risk-taking.(2)The initial level of financing constraints played a significant moderating role between financial equity linkages and corporate risk-taking,while relationship between executives' financial background and risktaking were not affected by the level of initial financing constraints,indicating that mechanisms that the two types of financial connection influence risk-taking are different.(3)The impact of financial linkages on corporate risk-taking is heterogeneous in different types of companies.The dependence on external finance strengthens the impact of financial linkages on risk-taking,while state property,technology intensity and equity incentives weaken the relationship.Based on the empirical results,this paper puts forward some suggestions such as guiding enterprises to make use of the financing advantages and establishing financial connection rationally.