Entrepreneurs are the most influential individuals in private enterprises. According to the basic conclusion of upper echelons theory, the values and perceptions of top managers are one of the reasons for the strategic choice of enterprises. Although the success of innovation can bring huge benefits to enterprises, enterprises may also suffer losses due to innovation failure. Enterprise innovati decision is a risky decision. According to the perceived internal and external environmental risks, entrepreneurs will formulate enterprise innovation strategies to maintain the best adaptation of enterprise innovation strategies to the internal and external environment. The entrepreneur is the key factor influencing the choice of innovation strategy. The external environment risk perception of the entrepreneur is the channel through which the external environment risk of the enterprise directly affects the innovation investment decision-making of the enterprise.
    The classical risk decision-making model regards entrepreneurs as "rational economic person" who can get complete information. Entrepreneurs make the normative decisions according to the principle of maximizing expected utility. However, in reality, It is obviously impossible for entrepreneurs to obtain complete information or to be homo economicu. Entrepreneurs are limited by many subjective and objective conditions in the process of decision-making. They often use the thumb rule and experience rule to deal with complex problems to get a simple conclusion. Entrepreneurs can only make decisions based on the limited information they perceive. The decision-making of entrepreneurs is usually descriptive rather than normative. That is to say, entrepreneurs often make "impromptu" decisions based on their own perception rather than seeking the optimal decision-making scheme. According to the nature of the external environment risk, the external environment risk can be divided into many dimensions. In this paper, the external environment risk is divided into two dimensions: market environment risk and institutional environment risk.
    The data of this paper mainly comes from the 2014 China Private Enterprise Survey (CPES) database. The dependent variable of this paper is enterprise innovation investment (Inn). The main independent variable of this paper is the entrepreneur′s external environmental risk perception (RP). According to the nature of the external environmental risk, we divide the external environmental risk perception of entrepreneurs into market environmental risk perception (ERP) and institutional environmental risk perception (PRP). In order to measure entrepreneurs′ perception of these risks, we selected 12 items from CPES as the measurement index. In order to extract entrepreneurs′ perception of different external environmental risks and the overall perception of external environmental risks from the items of the questionnaire, we use exploratory factor analysis (EFA) to extract common factors to achieve the purpose of compressing information. Using the result of the factor score, we further fold the entrepreneur′s risk perception. According to the factor scores, the high and low value groups of entrepreneurs′ risk perception are divided, and the differences between the two groups are controlled. It can be approximately regarded as a quasi-natural experiment, which is helpful for us to use the causal inference method to estimate the treatment effect.
    The contributions of this paper are as follows: first, following the research paradigm of upper echelons theory, the concept of risk perception is introduced, which combines the entrepreneur′s risk perception with the enterprise′s innovation investments directly, rather than using demographic characteristics as the agent variable of perception, the problem of "agent error" caused by using the representation of entrepreneur perception is avoided. Secondly, it expands the research field of risk perception. In the past, the research on individual perception and decision-making behavior mainly focused on natural disaster, consumption, entrepreneurship, etc. it is quite rare to explore the relationship between entrepreneurs′ external environment risk perception and the strategic choice of enterprise innovation from the perspective of enterprise risk management. Thirdly, the non-situational risk perception measurement paradigm is used to measure entrepreneur′s risk perception, which overcomes the problem of situational substitution in the traditional measurement paradigm. The standard psychological measurement paradigm of risk perception developed directly combines the psychological state and behavior of the respondents, which may lead to a certain situation suggestiveness. Due to the strong situational empathy of the respondents, the survey results will deviate from the systematic perception of the respondents.
    The conclusion of this paper has some policy implications. First, the market economy system naturally has the role of stimulating enterprises to increase innovation input. Emerging market countries should strengthen and improve the market economy system construction, which is conducive to promoting enterprises to actively innovate, dare to explore and constantly improve the competitiveness of enterprises. Second, emerging market countries should optimize the institutional system to create a good institutional environment for enterprises. A good institutional environment includes strong protection of property rights, healthy relationship between government and business, low level of the tax burden, convenient financing channels, etc. A good institutional environment is not only conducive to reducing the institutional transaction costs of enterprises, but also helps enterprises to reduce or shield various nonmarket risks, improve the risk-bearing capacity of entrepreneurs, so as to enhance the confidence of entrepreneurs in innovation investment and promote enterprise innovation. At the same time, the high-quality institutional environment creates a more fair and just market competition environment. The higher the intensity of market competition, the higher the private entrepreneurs′ perception of market environment risk. According to the research conclusion of this paper, the higher the entrepreneurs′ perception of market environment risk, the more enterprises tend to increase innovation investment. Third, enhance the self-identity of private entrepreneurs and strengthen the protection of private property. The entrepreneurs with higher perceived personal status have stronger subjective tolerance of external environmental risk and higher innovation enthusiasm. From the institutional and non-institutional level, we should enhance the self-identity of private entrepreneurs, strengthen the protection of private property, and make entrepreneurs better serve innovation.