Research On Relationship Of Top Management Team Heterogeneity,Managerial Discretion And Firm Risk-Taking

Reasonable risk-taking is the cornerstone of the company's development and growth.As a key force in decision making,the top management team(TMT)need to improve profits and create value for the company by constantly identifying and grasping and opportunities of risking investment.However,current research mainly focused on the overall characteristics of TMT.There is a lack of research on how diversity characteristics of TMT affect firm risk-taking.Based on the upper echelons theory,the paper constructed the theoretical model of the top management team TMT heterogeneity(functional background heterogeneity,educational background heterogeneity and tenure heterogeneity),the managerial discretion(shareholding ratio of TMT,organizational scale)and firm risk-taking.The paper focused on the mechanism of the TMT heterogeneity on the firm risk-taking.At the same time,the managerial discretion was included in the relationship of the TMT heterogeneity and firm risk-taking.This paper adopted the data of private listed companies of Growth Enterprise Market(GEM)in 2010-2016,and the panel data was empirically tested by using the fixed effect regression model.The direct effect of TMT heterogeneity and risk-taking was tested,then,analyzing which dimensions of heterogeneity have played a key role.At the same time,analyzing the regulating effect of managerial discretion from organizational level and management level.At organization level,choosing organization scale as a proxy variable,and at management level,selecting the holding proportion of TMT as a proxy variable.Results showed that the TMT heterogeneity could effectively promote the firm risk-taking,functional background heterogeneity had significant effect,and education background heterogeneity and tenure heterogeneity did not play a significant role.The shareholding ratio of TMT had strengthened the positive relationship between TMT heterogeneity and risk-taking,and the organizational scale weakened the positive relationship between TMT heterogeneity and risk-taking.This study deepens and expands the upper echelon theory,and the conclusion is of practical significance to the formation of TMT.