Management Risk Appetite And The Maturity Mismatch Of Investment And Financing Of Enterprises

At the current time,China’s economy has entered a new normal development model,and the Central Government has clearly proposed to adhere to the baseline of not incurring systemic financial risks,achieving this goal requires thousands of enterprises at the micro scale to work together to prevent systemic financial risks from occurring at the company level.Against this backdrop,it is of great relevance to conduct an in-depth study on the factors that affect the maturity mismatch of China’s enterprises’ investment and financing,the mechanisms at play and the mechanisms to mitigate them,so as to achieve a shift in the economy towards high-quality development.Researchers at domestic and international level have conducted extensive studies on matters associated with the mismatch of investment and financing maturities from the viewpoints of macro system,economic environment and laws and regulations,and have formed certain research results,but have ignored the influence of irrational factors of managers on corporate financial decision-making.As the initiators and leaders of corporate investment and financing decisions,the differences in managers’ personal characteristics and psychological preferences,especially their risk preferences due to multiple factors,are constantly amplified in corporate decision-making,which in turn has a profound impact on the formulation of corporate strategies,business models and development goals.In view of this,this paper analyses and organises the logical relationship and mechanism of the impact of management risk preference on maturity mismatch of firms’ investment and financing based on maturity matching theory,principal-agent theory,limited irrationality theory and higher-order echelon theory,with the managerial risk preference of public companies as the research lenses.This paper establishes an analytical chain of "management risk appetite-strategic aggressiveness-firm investment and financing maturity mismatch",taking Shanghai and Shenzhen A-share public firms from 2007 to 2020 as the study a sample.The research results show that:(1)Management risk appetite is significantly and positively related to corporate investment and financing maturity mismatch,that is,the stronger the risk preferences of management,the more severe the maturity misalignment between companies’ investment and financing.(2)Corporate strategic aggressiveness is a mediating variable between management’s risk appetite and investment financing maturity mismatch,playing a partial mediating effect between the two.The foregoing conclusions remain valid after substituting interpreted variables,explaining variables,robustness tests with changing sample intervals and endogeneity treatments using instrumental variables and propensity score matching methods.(3)The quality of in-house controls acts as a passive moderating influence in the correlation with management angles and maturity mismatches in corporate investment and financing.High-quality internal controls can weaken the effect of management’s risk preference on the maturity mismatch of corporate investment and financing.(4)Under the conditions of different ownership nature,degree of liquidity supervision and management shareholding,the promotion effects of management risk appetite on maturity mismatch in firms’ investment and financing are apparent in both SOEs and non-SOEs,but are more pronounced in non-SOEs;improving the level of regulation of flow-through lending and increasing management shareholding will help to curb the role of management risk preferences in exacerbating maturity mismatches in enterprise investment and financing.The conclusions of this article add to the body of research linking management risk appetite to maturity mismatches in enterprise investment and financing,and suggest ways for companies to focus on management’s risk appetite in the financial decision-making process,optimize the managerial election and employment mechanism,and perfect the incentive and disciplinary mechanism for management;provide a basis for financial institutions to increase caution in the approval of liquid loans and to monitor compliance after lending;and offer support with regard to effectively preventing systemic financial hazards and promoting quality economic growth.