Effect Of Executive Incentive And Team Characteristics On The Financial Risk

In recent years, because of the support of national policy, chinese high-tech enterprises developed rapidly and a large number of high-tech enterprises started listing on the gem. But most of the high-tech enterprises of gem are seed stage and growth stage enterprises which have the very high financial risk, so it is more and more important to control and avoid the high financial risk in the process of operation. Talent plays an important role in the development of the high-tech enterprises, especially their executives as the company’s operating decision maker participate in corporate strategic planning and play an important role in improving the performance and avoiding business enterprise risk. So the author both from executive incentive and team characteristics of hi-tech enterprises to find whether they have significant affects on the financial risk.Through selecting 195 listed high-tech enterprises from 2011 to2013 that total of 526 samples on the gem, the author uses regression to empirically analyze. First of all, it is to analyze the effects of executive incentive and team characteristics on the financial risk in the whole high-tech enterprises. Because Industry competition have affects on top management team effectiveness. Then according to the Industry competition, the whole high-tech enterprises are divided into competitive industry and less competitive industry to find the influence of executive incentive and team characteristics on the financial risk. Finally, in order to further explore the influence of industry competition, the competition in the industry is seen as a variable to explore the competitive industry if it plays a role in the regulation of the top management team characteristics influence on the financial risk. Through the results of empirical analysis, it provides suggestions to effectively reduce the financial risk of listed high-tech enterprises and provide measures to optimize executive team of listed high-tech enterprises.The results of empirical research showed that:(1)The whole high-tech enterprises listed on gem:The executives’ average salary, executives’ proportion of stock ownership,average executive education degree, the proportion of female executives,heterogeneity of age are inversely proportional to financial risk. The scale of the company is in direct proportional to financial risk. (2) In competitive industry:The executives’ average salary, average executive education degree, heterogeneity of age are inversely proportional to financial risk. The scale of the company and executive team is in direct proportional to financial risk. (3) In less competitive industry:executives’ proportion of stock ownership,average executive education degree, the proportion of female executives are inversely proportional to financial risk. The scale of the company is in direct proportional to financial risk. (4) Industry competition moderating affect on the financial risk in the top management team characteristics:the cross effect of industry competition and the average age of the executives play a negative regulatory role in the executives average age effect on financial risk; the cross effect of industry competition and the executive degree of heterogeneity play a positive regulatory role in executive education heterogeneity effect on financial risk.