| How to choose the proper strategy has become a hot topic in the field of management science.Existing academic researches focus on the impact of macro-environment such as politics and economy on the strategic choices.However,CEO,as the decision-maker and executor of corporate strategies,takes the responsibility of adjusting the corporate strategy behavior according to the change of internal and external environment constantly,and his or her individual characteristics and ability play vital roles in corporate strategy decisions.Taking listed firm in Shanghai and Shenzhen Stock Exchange from 2007 to 2017 as the sample and using the Principal-agent theory,the Upper echelons Theory and the Career concern theory,this paper examines the influence of CEO ability on the strategic choices.The results suggest that the higher the CEO's ability,the more inclined the company is to adopt offensive strategies and reduce defensive strategies,especially for private enterprises.From the perspective of CEO's characteristics,CEO ability has a more significant impact on the corporate strategic choices for enterprises with CEOs with older age,shorter tenure.Besides,the uncertainty of the company's external environment and industrial competition also affect the relationship between CEO ability and strategic choices.For enterprises located in regions with lower environment uncertainty or industries with lower competition,CEO ability is more likely to increase aggressive strategies and reduce defensive strategies.And when the environment uncertainty degree or the industrial competition degree is high,CEO ability has no significant effect on corporate strategies.Further research shows that CEO risk preference plays a significant intermediary role in the relation between CEO ability and strategic choices,that is CEO ability enhances CEO's risk preference,thus leading to more offensive strategies and fewer defensive strategies.In addition,The CEO ability to influence the company's strategic choices can increase the CEO's reputation while reducing the company's value.This paper extends the theoretical research on CEO ability and corporate strategy choices,and has certain reference value for fully understanding and exerting CEO ability and choosing appropriate corporate strategies.The results show that,on the one hand,corporates need to design effective recruitment and incentive mechanisms to select the appropriate CEO and give full play to the positive role of CEO ability;on the other hand,CEO need to pay attention to improving his or her own professional quality,accumulate work experience,improve their own ability positively,give full play to the positive role of ability in creating value for enterprises.Additionally,relevant departments should also promote the construction of professional manager market and cultivate high-quality,high-ability professional managers to provide better intellectual support for the development of enterprises. |
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