Abstract
As an important part of corporate financial activities,enterprise investment behaviors reflect major strategic decisions that have an important role in the continuous operation of the enterprise.The efficiency of enterprise investment directly affects the level of enterprise performance.A high level of investment efficiency can bring a high return on asset liquidity and profitability to the enterprise,whereas a low one not only harms the economic interests of the enterprise but also is not conducive to its sustained development.Senior management,as a main body of enterprise investment decision-making,holds the power of corporate investment decision-making.Due to the complexity of the external environment,corporate investment behaviors may be affected by executive cognitive and behavioral biases.Executive personal traits such as their tenure,educational background,degree,age,etc.,can directly affect their investment decisions.CEOs,as the highest decision-makers and core executives of the enterprise,play a crucial role in enterprise investment behaviors.Therefore,it is necessary to study the personal characteristics of CEOs as an influencing factor in corporate investment decision-making.A research report pointed out that there is an obvious trend towards younger CEOs in mainland China.However,the effect of younger CEOs on the enterprise is still a controversial issue as to whether they can inject new dynamics into the development of the enterprise.
There is limited literature on the relationship between CEO personal characteristics and enterprise investment decisions based on the upper echelons theory.Most of the research is conducted from the perspective of background characteristics of the top management team.Scholars have chosen different background characteris-tics of managers to conduct empirical research,and found a significant positive correlation between the average age of the top management team and investment efficiency.However,some studies have shown that the age of managers is negatively correlated with investment efficiency.There is no consistent empirical conclusion on the relationship between the age of executives and corporate investment efficiency.Based on literature reviews,existing studies mainly focus on the impact of background characteristics of management or the top management team on investment efficiency,and there is a lack of research focusing on the impact of CEO personal traits,especially age,on investment efficiency.Therefore,this paper takes CEO age as a particularly important factor and explores the impact mechanism of CEO age on enterprise investment efficiency.The research conclusions enrich the discussion on the impact mechanism of top management features on enterprise investment efficiency and have important implications and practical significance for the executive selection and human resource management of listed companies.
Based on the above analysis,this paper draws on relevant research results and selects the data of non-financial Shanghai and Shenzhen A-share listed companies from 2007 to 2020 as the sample for research.We take CEO age as a particularly important factor,and empirically analyze the impact of CEO age on corporate investment efficiency by constructing an OLS regression model.Furthermore,we construct an mesomeric effect model to test whether financing constraints have an mediating role in the relationship between CEO age and investment efficiency.In addition,we construct a moderating effect model to test the differences in the impact of CEO age on enterprise investment efficiency in firms with different ownership nature.
The empirical results show that CEO age significantly positively affects enterprise investment efficiency,significantly suppresses the problem with over-investment,and significantly alleviates the problem with under-investment.That is,the older the CEO,the higher the investment efficiency of the enterprise.The trend for younger CEOs can not necessarily lead to improving investment efficiency of the enterprise.Financing constraints play a mediating role in the relationship between CEO age and enterprise investment efficiency,meaning that the older the CEO,the lower the level of financing constraints faced by the enterprise,and the higher the investment efficiency.In state-owned enterprises CEO age has a large impact on promoting enterprise investment efficiency and alleviating under-investment compared with one in non-state-owned enterprises.However,there is no significant difference in the impact of CEO age on over-investment between state-owned and non-state-owned enterprises.
This study has the following implications:Firstly,in the process of enterprise development,it is necessary for firms to actively develop relevant and rational executive incentive policies related to enterprise investment behaviors.When implementing and managing incentive plans,firms should consider the age of executives and the issue of financing constraints.Firms should formulate and implement different recruitment and incentive measures for executives of different age groups.Secondly,from the perspective of long-term firm development,younger CEOs do not necessarily improve enterprise investment efficiency.Therefore,companies should not blindly advocate the selection of younger executives in their selection mechanisms,but need to combine the development situation of the enterprise and strengthen the assessment of the personal abilities of executives.Furthermore,it is necessary to improve the executive incentive system,enhance the long-term incentive role of executives,better motivate their proactiveness and enthusiasm,and avoid executive opportunistic behavior caused by principal-agent and information asymmetry problem.关键词
CEO年龄/投资效率/融资约束/中介效应Key words
CEO age/investment efficiency/financing constraints/mediating effect分类
管理科学
