Research On The Influence Of Chairman’s Military Experience On Enterprise Share Repurchase

As a financial tool,share repurchase helps to correct the irrational deviation of stock prices and maintain the stability of the capital market.In 2018,the Standing Committee of the National People’s Congress urgently reviewed and passed the “Company Law”,which further simplified the share repurchase decision-making process and clarified the decision-making power of the board of directors in the repurchase decision-making process.Based on upper echelons theory and imprinting theory,early life experiences can have a profound impact on an individual’s values and behavior.As the top leader of the board of directors,the chairman’s early military experience will have an impact on the decision-making behavior of the company.However,the existing literature mainly examines the influencing factors of share repurchase from the perspective of financial status and corporate governance,and there are few literatures that discuss the influencing factors of share repurchase in detail from the perspective of management characteristics.Therefore,this thesis takes China’s A-share listed companies from 2005 to 2019 as a research sample,and empirically tests the correlation and mechanism of the chairman’s military experience and share repurchase decision-making.This thesis also examines the governance effects of party organization governance and traditional Western governance structures on the chairman’s personal trait decision-making.This thesis finds that:(1)Companies whose chairman has military experience prefer share repurchase.(2)The overconfidence test shows that the military experience aggravates the chairman’s cognitive bias of overconfidence,forming managers’ optimism,and they are more inclined to believe that the corporate value is underestimated by the outside world,so they hope to realize the return of corporate value through share repurchase.The positive moderating effect of long tenure re-examines this logic.(3)From the perspective of the governance means of decision-making caused by this cognitive bias,the governance of the party organization can be used as a governance factor to inhibit personal overconfidence,thereby reducing the share return caused by the cognitive bias caused by the chairman’s personal overconfidence.However,the traditional western governance system has not significantly suppressed the influence of the chairman’s overconfidence on the repurchase decision.This study jumps out of the “rational economic man” hypothesis,supplements the factors influencing share repurchase decisions from the perspective of managers’ intrinsic characteristics,and theoretically expands the research paradigm of “culture and finance”.At the same time,this thesis finds the inhibitory effect of the party organization governance on the chairman’s personal characteristics decision-making,and then enriches the governance theory with Chinese characteristics,which is of great significance for optimizing share repurchase decision-making and optimizing the party-enterprise relationship in practice.