Journal of Northeastern University(Social Science) ›› 2020, Vol. 22 ›› Issue (6): 50-58.DOI: 10.15936/j.cnki.1008-3758.2020.06.007

• Economics and Management • Previous Articles     Next Articles

CEO Self-confidence and Enterprises Risk-taking——The Mediating Roles of Financial Derivatives Trading Strategy

ZHANG Zi-jing1,2, XING Tian-cai1, YUAN Ying2   

  1. (1. School of Finance, Dongbei University of Finance & Economics, Dalian 116025, China; 2. School of Business Administration, Northeastern University, Shenyang 110169, China)
  • Received:2020-04-06 Revised:2020-04-06 Online:2020-11-25 Published:2020-12-22
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Abstract: This paper empirically analyzes the mechanism by which the heterogeneous choices of financial derivatives trading strategies made by CEOs with different confidence levels affect corporate risk-taking based on the disclosure data of financial derivatives transactions of non-financial listed companies in China from 2008 to 2018. The results show that the overconfident CEOs can stick to the original intention of hedging, restrain the negative intermediary effect of speculative strategy and improve corporate risk-taking ability; the moderately confident CEOs tend to over-hedge, trigger speculative trading and reduce corporate risk-taking ability; low-confidence CEOs, out of defensive motives, avoid the use of complex risk control measures, and have a weak ability to resist risks. Further study shows that CEO with financial background can exert critical consciousness, adjust their speculative behaviors and correct their irrational risk preferences. The research conclusions provide constructive suggestions for companies to scientifically use derivatives, rationally allocate senior management teams, and improve risk control capabilities.

Key words: CEO self-confidence, financial derivatives trading strategy, mediation model

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