CEOs' Financial Background and Non-financial Enterprises' Shadow Banking Business

CEO financial background, managerial ownership, and corporate innovation: Insights from imprinting theory

The global ecological environment is facing increasingly severe challenges; therefore, it is crucial to implement sustainable development policies and promote corporate innovation. Based on imprinting theory, we examine the relationship between CEO financial background and corporate innovation within the Chinese context. The results confirm that CEOs with a financial background negatively impact corporate innovation, while managerial ownership mitigates this effect. Existing literature has considered the impact of CEO background on corporate innovation; however, it mainly takes up corporate innovation from the perspective of upper-echelon theory. In addition, the mechanism of CEO financial background on corporate innovation is ambiguous in the Chinese cultural context. This study enriches the literature on the relationship between the characteristics of CEO background and corporate behavior, thereby offering guidance for corporate innovation practices.

Facilitation or inhibition? Impact of CEO's financial background on industrial AI transformation of manufacturing companies

Introduction

The purpose of this paper is to empirically test the impact of CEO's financial background on industrial AI transformation of manufacturing enterprises based on upper echelons theory and imprinting theory.

Methods

The paper preliminarily takes listed manufacturing companies in Shanghai and Shenzhen stock markets that are affiliated to enterprise groups from 2014 to 2020 as samples, and manually collects and collates datas of CEO's financial background and industrial AI transformation. The research hypotheses are tested by stata 15.0 software.

Results

It is found that CEO's financial background significantly inhibits the industrial AI transformation of manufacturing enterprises, and when the CEO works part-time in the parent company, it will strengthen the negative impact of CEO's financial background on industrial AI transformation. Further research shows that enterprise financialization plays a partial intermediary role between CEO's financial background and industrial AI transformation; Compared with private enterprise groups, the inhibiting effect of CEO financial background on industrial AI transformation is stronger in state-owned enterprise groups; CEOs with non-banking financial background have a stronger inhibitory effect on industrial AI transformation.

Discussion

Firstly, based on the process of making business decisions, it verifies and clarifies the action mechanism of CEO's financial background on industrial AI transformation through internal driving mechanism, which expands the research horizon of industrial AI transformation, and further applies the Imprinting Theory in biology to the research of business decision-making, which forms a beneficial complement to the relevant research on economic consequences of CEO's financial background. Secondly, different from the research of single independent company, this paper focuses on the special situation of parent-subsidiary corporate governance, and explores the mechanism of action, deepening the research on the synergy of enterprise groups. Finally, this paper further explores the influence of CEO's financial background on industrial AI transformation, which is conducive to a deeper understanding of the heterogeneity of managers except manpower and capital factors in the industrial AI transformation practice of manufacturing enterprises, and provides a new idea and a more comprehensive analysis perspective for industrial AI transformation.

Non-Financial Enterprises’ Shadow Banking Business and Total Factor Productivity of Enterprises

This study empirically analyzes the impact of the shadow banking business (SBB) of non-financial enterprises (non-FEs) on the total factor productivity (TFP) of enterprises using data concerning non-FEs listed in China’s A-share market from 2008 to 2019. The results show that non-FEs’ SBB has a significantly negative impact on their TFP, and for every 10% increase in the involvement of non-FEs in SBB, their TFP decreases by 4.22% on average. The negative effect is more significant in the period of loose monetary policy, lower industry competition, and non-state-owned enterprises. Alleviating financing constraints, reducing information asymmetry, and optimizing financial resource allocation may mitigate the negative effect. Our study reveals the mechanism by which non-FEs’ SBB inhibits their TFP. These findings enrich the theoretical research on the two, and provide empirical evidence to alleviate the “off real to virtual” of the economy and promote long-term, high-quality and sustainable economic development.