Research On The Impact Of Executives’ Willingness To Take Risks On The Financialization Of Listed Companies

With the continuous development of social economy,the trend of financialization of real enterprises is also deepening.The executive risk-taking willingness is a manifestation of executive traits,which can often influence the strategic decisions of enterprises,and therefore has a certain influence on the financialization behavior of enterprises.Existing theoretical research suggests that there are two main types of motivation driving corporate financialization: precautionary and speculative.The two theories reflect two distinct influences between risk and financialization,and therefore,the relationship between risk and financialization needs to be further explored.In view of this,this paper explores the relationship between risk-taking behavior and financialization from the perspective of executive risk-taking willingness.Through the analysis of existing theoretical studies,this paper raises the main research question: Does the impact of executives’ willingness to take risks on the financialization of listed firms have a greater impact on preventive or speculative motives? Is there heterogeneity in this influence mechanism across firm samples?Based on the above questions,this paper selects the listed non-financial firms in China’s Shanghai and Shenzhen stock markets from 2011-2020 as the research sample,takes CEO overconfidence and firm strategic differentiation as proxy variables for executive risk-taking willingness,and conducts regression analysis through a fixed-effects model to conclude that executive risk-taking willingness has a significant positive effect on firms’ financialization behavior,suggests that the influence of executives’ willingness to take risks on the financialization of listed firms is more speculatively motivated.This result remains robust when replacing the financialization variables and replacing the model with a generalized moment estimation model.Meanwhile,through the heterogeneity tests,this paper finds that: the effect of executive risk-taking willingness on financialization is more significant for firms in the east and central regions;this effect is more significant before the release of the new asset-management rules;the positive stimulus effect of executive risk-taking willingness on financialization is more significant for firms with low financing constraints;and this stimulus effect is relatively more significant for non-state-owned firms.Having drawn the above findings,this paper proposes corresponding policy recommendations based on the research results and the current status of financialization,such as strengthening the regulation and guidance of financialization behavior and optimizing the structure of enterprises.