Managerial Foreign Experience and Corporate Risk-Taking: Evidence from China

50 Pages Posted: 3 Dec 2019

See all articles by Zixiong Sun

Zixiong Sun

Massey University - School of Economics and Finance

Hamish D. Anderson

Massey University - School of Economics and Finance

Jing Chi

Massey University - School of Economics and Finance

Date Written: August 1, 2019

Abstract

This study investigates the relation between managerial foreign experience and corporate risk-taking in China. We find that foreign experienced managers are positively associated with corporate risk-taking and this relationship mainly exists in private firms rather than in state owned enterprises (SOEs). The positive association is more pronounced for executives who gain their foreign experience from countries with advanced management practices and for foreign practical experience rather than educational experience. Short-term visiting experience has no impacts on corporate risk-taking. The positive relationship between managerial foreign experience and corporate risk-taking in private firms is more persistent among firms with more resources, better corporate governance or weak external environments and monitoring. Finally, evidence shows that risk-taking executives with foreign experience are more likely to enhance firm value and performance.

Keywords: Managerial foreign experience, Risk-taking, Corporate governance

JEL Classification: G32, G34, G38, L33

Suggested Citation

Sun, Zixiong and Anderson, Hamish D. and Chi, Jing, Managerial Foreign Experience and Corporate Risk-Taking: Evidence from China (August 1, 2019). Available at SSRN: https://ssrn.com/abstract=3488526 or http://dx.doi.org/10.2139/ssrn.3488526

Zixiong Sun (Contact Author)

Massey University - School of Economics and Finance ( email )

Private Bag 11-222
Palmerston North, 30974
New Zealand

Hamish D. Anderson

Massey University - School of Economics and Finance ( email )

New Zealand

Jing Chi

Massey University - School of Economics and Finance ( email )

Private Bag 11-222
Palmerston North,, 4442
New Zealand
+64 6 3569099 Ext. 84048 (Phone)
+64 6 350 5651 (Fax)

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