Executive Financial Background,Asset Tightening Strategy And Corporate Turnaround In Recession

Recession is a necessary process for the survival and development of enterprises.In particular,the sudden outbreak of COVID-19 at the end of 2019 has caused a severe setback to the global economy.All countries have experienced rapid economic decline,severe contraction of consumption and sharp increase in unemployment,which have posed huge challenges to the operation and development of enterprises.Choosing appropriate strategies to cope with recession and successfully reverse it is the premise for enterprises to achieve high-quality development.In order to help enterprises achieve sound development,this paper takes the data of A-share listed companies in Shanghai and Shenzhen from 2006 to 2020 as samples,selects ROA as the examination index of enterprise performance,and selects declining enterprises and reversing enterprises through circular screening.This data is taken as a research sample and combined with empirical test,the following studies are carried out:In the context of recession,this paper studies the relationship between the financial background of senior executives and the corporate reversal,and concludes that the higher the proportion of senior executives with financial background in the corporate executive team,the more conducive to the corporate reversal in recession,and the two have a significant positive correlation.This paper studies the relationship between the financial background of senior executives and the asset tightening strategy under the situation of recession.It is concluded that the higher the proportion of senior executives with financial background,the more inclined to adopt the asset tightening strategy to divest assets.Based on the analysis of the mechanism of the influence of executives with financial background on the reversal of declining enterprises,based on the perspective of resource-based view,the mediating role of asset contraction strategy is obtained.It is found that executives with financial background tend to use resource contraction strategy to help enterprises achieve reversal when facing the situation of corporate recession.The sample data are classified into non-state-owned enterprises and state-owned enterprises,and the influence of senior executives with financial background on corporate reversal under different property rights is analyzed.It is concluded that the influence of senior executives’ financial background on corporate reversal in declining enterprises is more significant in state-owned enterprises,which verifies the influence of senior executives’ financial background on corporate reversal in declining enterprises.Through the above research and empirical test results,the paper puts forward the strategic choice and policy suggestions for the enterprise reversal in recession.