Executive Finance Expertise,Life Cycle And Enterprise Value

At present,China is gradually promoting the construction of a socialist modernized economic system,and enterprises,as the main body and main participants of China’s market economy,play a very important role in the development of the country.And market vitality comes from people,especially from entrepreneurs.The separation of ownership and operation of enterprises is one of the most common features of listed companies in China,and the interests pursued by the two are not consistent due to the existence of agency problems.And the managers hold the operating power of the enterprise and often have a certain degree of influence on the strategic decisions and corporate value of the enterprise.The top echelon theory points out that the strategic choices of top managers are influenced by their characteristics;in other words,executives with different characteristics make different business decisions and differ in the impact they have on the value of the firm.In view of this,this paper studies the relationship between executive financial expertise and enterprise value,and explores the impact of executive financial expertise on enterprise value for enterprises in different life cycle stages,using different life cycle stages of enterprises as classification criteria.This paper empirically explores the relationship between executive financial expertise,corporate life cycle and corporate value based on the top echelon theory,information asymmetry theory,principal-agent theory and corporate life cycle theory,using data of China’s listed companies in Shanghai and Shenzhen A-shares from2010 to 2019 as research samples.Secondly,we introduce categorical variables and use Dickinson’s cash flow method to classify corporate life cycle to study the impact of executive financial expertise on corporate value in the growth,maturity,turbulence and decline periods.Finally,the impact of executive financial expertise on firm value is further investigated,as well as the impact of executive financial expertise on firm value for different types of firms.The findings of this paper are as follows:(1)There is a significant positive relationship between executive financial expertise and firm value,executive financial expertise can promote the enhancement of firm value.(2)In terms of different life cycles,executive financial expertise can promote firm value in growth,maturity and turbulence periods,while there is no significant effect of executive financial expertise on firm value in recession periods.(3)Further study finds that there is a lagged effect of executive financial expertise on firm value;there is a significant effect of executive financial expertise on firm value in non-state-owned enterprises,but the effect is not significant in state-owned enterprises.By studying the impact of executive financial expertise on firm value,this paper makes the conclusions more specific and relevant.It also explores the impact of executive financial expertise on firm value at different life cycle stages by using different life cycles as grouping variables,which provides a dynamic research perspective and enriches the relevant research literature.For enterprises,it provides some feasible suggestions for selecting and hiring executives and optimizing the executive team.