ASU Electronic Theses and Dissertations
This collection includes most of the ASU Theses and Dissertations from 2011 to present. ASU Theses and Dissertations are available in downloadable PDF format; however, a small percentage of items are under embargo. Information about the dissertations/theses includes degree information, committee members, an abstract, supporting data or media.
In addition to the electronic theses found in the ASU Digital Repository, ASU Theses and Dissertations can be found in the ASU Library Catalog.
Dissertations and Theses granted by Arizona State University are archived and made available through a joint effort of the ASU Graduate College and the ASU Libraries. For more information or questions about this collection contact or visit the Digital Repository ETD Library Guide or contact the ASU Graduate College at gradformat@asu.edu.
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- Creators: Shen, Wei
Considering that managerial risk taking is an important issue in strategic management research and agency theory has been widely adopted in academia and business worlds, it is imperative to clarify the mechanism behind the relationship between CEO power and risk taking. My study aims to fill this research gap. In this study I follow agency theory to take an employment security perspective and fully consider how CEOs’ concern about employment security is affected by their power and ownership structure to enrich the understanding of the effects of CEO power and ownership structure on risk taking. I fine-tune the key concept CEO power into the CEO power over board and introduce a key aspect of ownership structure - nontransient investor ownership. I further suggest that CEO power over board and nontransient investor ownership affect CEOs’ employment security and the resulting CEO risk taking. In addition, I consider a set of industry and firm characteristics as the boundary conditions for the effects of CEO power and nontransient investor ownership on CEO risk-taking. This set of industry and firm characteristics include industry complexity, industry dynamism, industry munificence and firm slack.
I test my theory using a large-scale, multi-year sample of U.S. publicly listed S&P 1500 firms between 2001 and 2017. My main hypotheses about the effects of CEO power over board and nontransient investor ownership on CEO risk taking receive strong support.
To address the first issue, I draw an important distinction between international investment banks and multinational investment banks. For an international investment bank to be regarded as a multinational, I propose that it must have a strong presence (i.e., holding at least one percent of the market share) in at least two of the seven major capital markets in the world. Using this criterion, I identify 25 multinational investment banks. I then analyze their home countries’ domestic market conditions and propose that the following six factors are important to the development of multinational investment banks: the size of the home country’s gross domestic product (GDP), the total capitalization of its domestic security market, the number of its Global 500 firms, the volume of its foreign direct investment (FDI), the internationalization of its currency, and the openness of its capital market to foreign investors.
By comparisons, I find that China’s domestic market conditions are comparable to the home countries of multinational investment banks with respect to the size of GDP, total market capitalization, the number of Global 500 firms, and the volume of FDI. What China lags behind are the internationalization of currency and the openness of capital market to foreign investors. Given the current trends of development, it is very likely that China will be able to catch up on the latter within ten years, thus meeting all the conditions necessary for the development of multinational investment banks.
Based on the above findings, I suggest that Chinese investment banks seize this historical opportunity, speed up the internationalization of their businesses, and learn from the experiences of global industry leaders to become truly multinational corporations.