Research On The Impact Of Enterprise Life Cycle On Risk Taking

In recent years,with the development of the economy and society,the risk-taking problem of enterprises has gradually attracted the attention of relevant government departments and the community.A large number of studies in the past have shown that the risk-taking of enterprises is particularly important for their healthy development.Excessive risk-taking is likely to cause financial crisis in enterprises.And risk-taking which is too low is not conducive to the long-term development of enterprises.Only appropriate corporate risk-taking levels can enhance corporate value and thus promote social and economic development.Enterprise risk-taking is the inevitable result of the company's own rational or irrational initiative to take risks.The enterprise's own factors are especially important for its risk-taking behavior.Therefore,this paper selects some typical variables of the characteristics of the enterprise's own development stage—the life cycle of the enterprise,dynamical examines of the level of enterprise risk tolerance under different life cycle stages and the channel of impact of the enterprise life cycle on risk exposure.This paper selects the annual panel data of 751 listed companies in Shanghai and Shenzhen from 2012 to 2017 as samples.Firstly,by measuring the volatility of corporate profits and the standard deviation of stock returns,the risk exposure level of enterprises is measured.And the relationship between business life cycle and risk taking is studied.The study finds that the level of risk-taking of a company changes with the life cycle of the company.That is to say,its risk-taking level is relatively large when the enterprise is in the initial stage and the recession period;its risk-taking level is small when it is in the growth stage and maturity stage.Then this paper adds R&D innovation,corporate financial leverage,and executive compensation as mediator variables to study whether there is a mediating effect.Through empirical tests,the research finds that the transmission process of the enterprise life cycle to the enterprise risk commitment is at least partly realized through the intermediary effect of R&D innovation,corporate financial leverage and executive compensation.Among them,the mediation effect of R&D innovation is the most significant.Finally,the paper further tests the above relationship from the industrial level,and finds that the impact of the life cycle on the risk exposure of the enterprise presentsindustrial differences.Specifically,the life cycle of enterprises in the secondary industry still affects the level of risk tolerance,and there is a mediating effect.However,the life cycle of the enterprises in the tertiary industry has no significant relationship to risk exposure.Accordingly,for enterprises affiliated to different industries,relevant government departments should establish reasonable risk-bearing level standards,which cannot be generalized.For enterprises in the secondary industry,the government should reasonably guide them to increase R&D and innovation and improve their core competitiveness.