The Level Characteristic And Governance Of Enterprise Moral Hazard:Perspective Of Principal-agent

Enterprise moral hazard is an interdisciplinary issue involving economics, management and ethics. In recent years, around whether the enterprises should undertake social responsibilities or not and undertake what kinds of social responsibilities, why the enterprises trap into moral hazard, how to govern and manage enterprises’moral hazard and so on, the academia have make a wide range of researches. From the perspective of management, the enterprise moral hazard is a concern issue. Based on its level reflection in internal corporate governance and external constraints, and based on it throughout the whole process of principal-agent, this paper analyzed the level characteristic and governance of enterprise moral hazard, and tried to take it into the scope of management research from the perspective of principal-agent.This paper argues that the essence of internal or external trade relationships, lies in the possibility for enterprise to use of information and other aspects of advantage taking moral-hazard behaviour to achieve the maximization of self-interest. Principal-agent contract is actually a kind of contract among stakeholders and the diversity of stakeholder relationships lead to the level characteristic, which can be broadly understood or defined as enterprise moral hazard. To the risk level in terms of characteristic, the degree of utility conflicts between stakeholders and the enterprise can be put as the level characteristic of the enterprise moral hazard. This paper analyzed the connotation, determinants and mechanism of the level characteristic. On this basis, we built analysis framework of principal-agent moral hazard issue according to the enterprise type difference and diversified stakeholders, and tried to study the inner mechanism of the enterprise moral hazard systematically.This paper can be divided into four main parts. The first part involving the introduction and literature review mainly introduced the basic condition of the study and the present research situation of this issue, especially gave the specific understanding of several key concepts involving in this paper. The second part which is the core part of this paper has explored the level characterisic of moral-hazard relationship and its explanation function, and has constructed the simple and expansion model of enterprises’ moral hazard in the view of principal-agent which helped the paper analyze the enterprises’ moral-hazard choices and achieved some useful propositions and inferences. The third part explained the moral hazad of Chinese enterprises based on the main theoretical conclusions of this paper and made a simple empirical analysis on the basis of Chinese listed companies. The forth part put forward the main conclusions of this paper, some suggestions on the governance of enterprises’moral hazard and research outlook of this study.This paper argues that enterprise type difference is an important factor related to moral hazard management contracts. And the particularity of this factor is that, whether the stakeholder can design the management contract based on the authenticity of information in the premise of cost control, so as to reflect the corporate governance effect of moral hazard. The level characteristic of the enterprise moral hazard has a significant influence on stakeholders and enterprise choice, but the mechanism is very complex and the theoretical analysis in this paper inclined to think that the relationship of stakeholders and level characteristic is positive, while the probability of enterprise ethics behavior features an inverse relationship. These views may have the value of furthure research.On governance mechanism of enterprise moral hazard, this paper argues that supervison, regulation, guarantee, trust and so on will encounter role boundary. Whether the governance can produce expecte effects is not only related to the regulation force, but also affected by le level characteristic of trade relationship between stakeholder and enterprise to some extent. On the other hand, the conflict and decision relevance among stakeholders will affect enterpirse’s moral choice, in most cases, the conflicts among stakeholders has the potential to be mechanism to guard against enterprise moral hazard, because it can get additional arbitrage to reducing the probability of moral hazard. In my opinion, these views reflected the mix of the management theory and economics theory to some extent.As an extension of the further analysis to the issue, this paper argues that, the agent under the principal-agent contract should not be confined to the manager role, the agent with supervision power also need to be considered. And there is collusion motivation between agent with supervision power and manager, this can be achieved by the size of the supervision cost, power and motivation which is formed by the incentive mechanism of the current allocation proportion to explain. Obviously, such and interpretation would involve two other important factors of the enterprise moral hazard, that is the deal structure and scale of return are also important variables influencing enterprise moral hazard. In terms of deal structure, in the limited-time deal, once the enterprise appear moral-hazard behaviour, its subsequent optimal choice is to quiq echical choice again, and the good historical transaction records are not sufficient to ensure that the enterprise to make ethical decision again. Repeat deal structure has comparative advantage. Scale return feature affects the enterprise’s choice by the marginal output mechanism.Based on the above understanding, on the basis of the principal-agent in the process of Chinese listed company, this paper make and empirical analysis of the enterprise moral hazard problem, and find that the state-owned shares and its proportion, the relative shares proportion of the first major shareholder, return on invested capital, sustainable growth rate, growth ability (Tobin q), the size of board, meeting-attending condition of independent directors, internal employees shareholding, market governance, debt-paid capacity and the listed time are the main factors which are in significant correlation to the enterprieses’moral hazard without multicollinearity. Although the correlation test is still worth investigating in some aspects, but it is basically reveals the Chinese enterprise moral hazard problem on the principal-agent perspective.To study the enterprise moral hazard from the level characteristic and governance on the principal-agent perspective is a relatively novel observation point. If there is some possible innovation, it maye be the combined analysis of type of enterprise, deal structure, agent with supervision power and stakeholders to some extent. And it broadens the scope of the enterprise moral hazard research. Of course, this possible innovation will also lead to the deficiency and defect of this paper, which remain to be perfected in the future.