Idiosyncratic risk and executive opportunistic stock selling—Empirical analysis based on behavioral agency model
Executives'risk-taking is often of great significance to the development of enter-prises.Based on the behavioral agent model,this paper uses opportunistic stock selling behavior to depict the degree of executives risk-taking.Taking the A-share listed companies in Shang-hai and Shenzhen from 2006 to 2022 as the object of investigation,this paper deeply analyzes the influence and mechanism of trait risk on executives'opportunistic reducing behavior and discusses the governance effect of internal and external supervision mechanism.The results in-dicate that idiosyncratic risk significantly promotes the opportunistic stock selling of executives.In addition,combining with the problem framing,this paper finds that the positive framework will strengthen the promoting effect of trait risk on executives'opportunism stock selling,while the negative framework will weaken this effect.Heterogeneity analysis shows that this influence is affected by the risk bearing of executives.This effect is more significant when executives with risk perception,and enterprises have controlling shareholders engaged in equity pledges,and operate in industries with high levels of competition.The study also finds that idiosyncratic risk increases the probability of abnormal changes in executive positions,which highlights the risks faced by executives under idiosyncratic.Furthermore,the article examines the role of internal governance,external supervision,and equity incentive design in mitigating executive loss aver-sion.The study finds that having multiple major shareholders,effective internal control systems and institutional investors as external supervisors can effectively suppress the opportunistic stock selling of executives under the influence of idiosyncratic risk.However,equity incentive designs do not curb executive loss avoidance.Equity incentive design also strengthens the promotion of executive opportunistic reduction under idiosyncratic risks by making executives more focused on their instant endowment.The research conclusion emphasizes that effective internal governance systems and institutional investors are crucial for restraining executive loss avoidance under id-iosyncratic risks.
idiosyncratic riskopportunistic stock sellingbehavioral agency modelinternal control
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