The Background Characteristics Of Top Management Team And Equity Financing Preference

Equity financing is the one of main financing methods for the listed companies to raise funds in order to expand their scale or improve their profitability and so on.Since the establishment of China's stock market,more and more Chinese listed companies have preferred equity financing for financing convenience.Existed researches have showed that there is significantly equity financing preferences of listed companies in China.According to the Behavioral Finance Theory and Upper Echelon Theory,the strategic decision and organizational behavior of the Corporate will be influenced by the personal characteristics of the Top Management Team.As one of the important decisions of the listed company,financing decision will inevitably be influenced by the background characteristics of the Top Management Team.However,few scholars have studied the influence of background characteristics on the company's equity financing preference behavior from the perspective of Top Management Team.On the basis of literature review and the theories of Pecking Order Theory,Behavioral Finance Theory,Upper Echelons Theory,Managerial Entrenchment Theory,we selected A-share manufacturing companies listed in Shanghai and Shenzhen stock market from 2013 to 2017 as study sample.We used empirical methods of regression analysis for the relationship of the background of education,age,overseas and academic,and conducted a robustness and reverse causality test on the regression results.Finally,this paper further analyzed the impact of equity financing preference behavior on corporate performance.The conclusions are as follows:First of all,the educational background characteristics of the Top Management Team are positively correlated with the equity financing preference behavior of listed companies in the manufacturing industry.Because the high level of education will weaken the overconfidence of managers when they faced financing needs,they will increase their preference for equity financing.Secondly,the age background characteristics of the Top Management Team will negatively correlated with the equity financing preference.The higher age of the Top Management Team,the greater of defense ability of the Top Management Team and then there are lower equity financing preference for the company.Third,the overseas background characteristics of the Top Management Team and the equity financing preference have a positive trend,but the result is not significant.Fourth,the academic background characteristics of the Top Management Team are positively correlated with equity financing preference.Because academic experience will reduce the degree of managerial overconfidence,so they will increase the company's preference for equity financing.Finally,the equity financing preference behavior positively correlated with the performance of listed companies.In summary,the research in this paper provides new empirical evidence for the relationship between the background characteristics of the Top Management Team and the company's equity financing preference behavior,and has a certain positive impact on understanding the equity financing preference behavior.