Research On The Impact Of Managerial Ability On Corporate Risk-takin

Enterprises profit from taking risks.The level of Corporate Risk-taking is the concentrated embodiment of enterprise strategy and managers’ risk preference.The level of Managerial ability will affect their decision preferences,which will have an impact on Corporate Risk-taking.In recent years,due to the outbreak of COVID-19,the Russia-Ukraine war and other major events,the Economic Policy Uncertainty(EPU)of China has increased significantly,and managers with different abilities have different measures to deal with it,which further affects Corporate Risk-taking.At the same time,Directors’ and Officers’ Liability Insurance(D&O),which provides legal support and economic liability compensation protection for managers,can have different effects on Corporate Risk-taking because of its different effects on managers with different abilities..Based on the above background,this paper takes Chinese A-share listed companies from2010 to 2021 as samples,mainly combining with the high-level echelon theory,to analyze and test the relationship between Managerial ability and Corporate Risk-taking,as well as the regulatory effects of EPU and D&O.The results show that:(1)there is a U-shaped relationship between Managerial ability and Corporate Risk-taking.With the improvement of Managerial ability,the level of Corporate Risk-taking first decreases and then increases;(2)The increase of EPU can make the U-shaped curve between Managerial ability and Corporate Risk-taking steeper and the inflection point moves to the right;(3)The purchase of D&O can make the U-shaped curve between Managerial ability and Corporate Risk-taking smoother,and the inflection point moves to the left.Further research shows that two external supervision methods,the increase of analyst attention and the hiring of "Big Four" accounting firms can make the U-shaped curve smoother,and the inflection point shifts to the left.The research contribution of this paper mainly lies in enriching the research on the pre motivation of Corporate Risk-taking,providing new ideas for enterprise risk control,and also provide a new reference for the government to implement economic policies,the selection of senior executives and the purchase of D&O,and increase the supervision methods and intensity of investors.