The Impact of Financial Flexibility on Enterprise Risk-Taking

Abstract

Economic globalization has made corporate risks complex and diverse. In recent years, the international economic environment and China's policy changes have prompted people to increase their risk awareness. Enterprise risk-taking is the fundamental driving force for economic growth and is vital to the survival and development of enterprises. Therefore, based on the theory of resource dependence, this paper takes the A-share listed non-financial enterprises in 2014-2018 as a sample and establishes a fixed-effect model to study the impact of financial flexibility on the enterprises risk-taking. The research finds that financial flexibility can significantly promote enterprise risktaking, in non-state-owned enterprises and agents. In enterprises with low conflicts, financial flexibility plays a more stronger role in promoting corporate risk-taking. The research in this paper not only enriches the relevant literature on financial flexibility and enterprise risk commitment, but also contributes to the financial resource reserve and risk commitment decision of the enterprise. Keywords—financial flexibility; Enterprise risk-taking; property right; agency cost