The Impact Of Executive Stock Ownership On Corporate Risk-taking:Benefit Convergence Effect Or Managerial Defense Effect

Administrative shareholding as an incentive system aims to tie the interests of executives to the recital and jeopardies of the company.Through the way of executive shareholding,it can encourage executives to actively take jeopardies in investment decisions,create value for enterprises,increase wealth for shareholders,and appreciate the equity they hold.Based on the shareholding of senior executives and major shareholders of listed companies in China,this paper comportments an empirical analysis of the previous literature and the company’s financial indicators*and studies the economic effects of executive shareholding from the perspective of corporate jeopardy beating.At present,some enterprises have insufficient risk bearing,resulting in a long-term downturn in development,or excessive risk-bearing has led to the brink of impoverishment.Because the executives hold shares in the company they work for and become shareholders in the company,the investment decisions they make have an impression on the risk assumption of the company.Previous scholars mostly focused on the impact of executives’ shareholdings on company presentation and company value,and few directly involved research from the perspective of corporate risk-taking.One of the important ways for companies to improve performance and increase profits is to carry out investment activities,and investment activities must be accompanied by risk-taking.As the key person in investment decision-making,executives,because they hold the company’s equity,take into account the risks and benefits when conducting investment activities,and study and judge the impact an the value of their equity and company performance.Therefore,this essay uses the economic effects of executive shareholding from the perspective of risk bearing,picks out 2015 to 2019 as a diagram from China’s Shanghai and Shenzhen A-share itemized companies,and revisions how administrative shareholding affects corporate risk bearing,and how the relationship between the two will change.Essay has made known that there is an overturned U-shaped affiliation between administrative shareholding and company danger assumption,which rises first and then declines.When the senior management shareholding is lower than the critical value,the convergence effect of the interests of the executive shareholding increases the level of enterprise risk bearing;when it is above the critical value,the management defense effect of the executive shareholding decreases the level of enterprise risk bearing.Thinking of the difference between the influence of administrative shareholding on company jeopardy hypothesis under different equity concentrations,it is found that in companies with high equity attentiveness,the lethal value point between administrative shareholding and company jeopardy hypothesis is more lagging behind the critical value point between executive shareholding and enterprise risk assumption in establishments with low evenhandedness attentiveness,that is the convergence effect range of executive shareholding interests of enterprises with high equity concentration is greater than that of enterprises with low equity concentration.