Management Power,Risk-Taking And Enterprise Value

According to the theory of upper echelon,the normal operation of an enterprise is related to the decision-making and operation of managers.The cognitive basis and values of managers will affect their strategic choices and further affect the behavior of enterprises.Therefore,the importance of managers in the development of enterprises can be imagined.Power represents the influence of the management of the enterprise on the enterprise.The more weight the "discourse" of the manager has,the more influence it will have in the enterprise’s decision-making of production and operation and in the process of enterprise value appreciation.At the same time,the separation of the two powers of enterprises is institutionalized and legalized,which has become an important feature of modern enterprises.Shareholders entrust managers to manage the enterprise on their behalf,while shareholders,as principals,do not participate in the daily operation of the enterprise and cannot observe the behavior of the agents.The existence of principal-agent relationship makes the entrusting party can only get asymmetric information,and the moral hazard and adverse selection of managers will cause the decision made by the entrusting party with information advantage to infringe on shareholders’ rights and interests,thus reducing the value of the enterprise.On the other hand,enterprise risk activities depend on the managers making decisions,and enterprises’ risk preference is closely related to the individual risk preference of decision makers,which is also a hot research object in the field of financial research.Therefore,the level of enterprise risk taking in a sense highly represents the attitude of enterprise management decision makers to take risks.The level of risk-taking is not only affected by external factors such as macroeconomic policies,but also affected by various behaviors and activities of enterprises,and the level of risk-taking will ultimately affect the value and performance of enterprises.Based on the above issues,to explore the relations among management power,risk level,and enterprise value,further study the path and size of managers using their authority to influence the enterprise value.This article selects the Chinese a-share listed companies in 2009-2018 sample data for empirical research,using multiple linear regression method to explore the relationship between manager’s authority and enterprise value,the relationship between the risk bearing level and enterprise value.Furthermore,the level of risk taking is taken as a mediating factor to explore whether it plays a mediating role in the process of the influence of management power on enterprise value,analyzing the mediating effect mechanism of the relationship among the three variables.The analysis shows that there is a negative correlation between management power and enterprise value,and the relationship between enterprise risk taking level and enterprise value is significantly positive.Moreover,the influence of management power on the enterprise value of listed companies is partly transmitted through the level of risk taking,and the mediating effect of the level of risk taking is significant and partly mediating.In this paper,in addition to inhibiting endogenesis by using the data of one lag period in the model,the two-stage least square method is also used for IV estimation.The hypothesis proposed in this paper is still valid,which improves the credibility of the empirical study in this paper.In addition,the regression results obtained by replacing key variables with variable substitution method are robust,which also improves the robustness of the research conclusions.Finally,on the basis of theoretical analysis and empirical analysis conclusions,this paper puts forward suggestions from four different perspectives of listed companies,managers,investors and appraising.The research of this paper plays a certain role in supervising and restraining the management power of listed companies in China,improving the efficiency of corporate governance and enhancing the value of enterprises.It also provides a reference for enterprise value evaluation in asset evaluation.