Can Returnee Managers Promote Corporate Risk-Taking——Evidence from Chinese A Share Companies
- SONG Jianbo, WEN Wen & WANG Dehong
SONG Jianbo, WEN Wen (Renmin University)
WANG Dehong (Beijing Foreign Studies University)
Using firm-level data of Chinese A-share listed companies from 2001 to 2015 and based on upper echelons theory, this paper investigates the impact of returnee managers on corporate risk-taking. This paper finds that returnee managers can promote corporate risk-taking. This effect is stronger when the number and percentage of returnee managers are larger among top management teams. Specially, when managers with foreign experience are at key positions, they can significantly increase the likelihood of corporate risk-taking. In addition, the effect of returnee managers on corporate risk-taking only exists when managers obtained experience from countries with better economic development and higher investor protection index. Further analysis shows that returnee managers influence corporate risk-taking through the channel of R&D expenditure and corporate innovation, but has no significant effect on debt financing. By demonstrating that returnee managers as corporate human capital has significant impact on the development of corporations, this paper provides support for government's talent recruitment strategy and enterprises introducing talents with foreign experience.
- Returnee Managers, Corporate Risktaking, Upper Echelons Theory, Job Characteristics, Institutional Environment