Research On The Stock Incentive Sensitivity Of The Companies In China Based On The Beyond Property-right Theory

Research on the stock incentive sensitivity of the companies in China based on the beyond property-right theoryThe purpose of this research is to explore what types of companies in China are more suitable to play the role of the stock incentive to enhance the business performance of the companies.As a long-term incentive scheme for the managers and employees in the company management, the stock incentive created in the United States in 50's of the 20th century. The first extrusion of Pfizer's stock option plan means the stock incentive emerged actually. In 60 years from generation of the stock incentive its theory and empirical research have got broad development. The previous theoretical studies have shown that the implementation of the stock incentive for the high-level corporate managers (agents) is to solve the modern companies' existence of principal-agent problem in an effective manner. Meanwhile, at home and abroad, most of empirical studies on the stock-based incentive and the performance-related business shown the positive correlation between the stock incentive and the corporate performance.According to the 1049 companies' statistical data from 1974 to 1986. Jenson and Murphy's regression analysis results show that the effects of stock incentive are greater than those short-term incentives, such as bonus and other incentives. Through the research, Kaplan and Smith pointed out that the shareholdings of the company have incentives to improve the business performance. They found that after senior managers in the company financing the acquisition, the company will significantly improve operating results. Smith also noted that the shareholdings stimulated the senior managers'motive to create more left profit of the company, thus improved the company's operational efficiency and business performance. In empirical study abroad, there are more conclusions to support the relativity between the stock Incentives and the business performance.In 2000 Li Zengquan found that the stock incentive may help to improve the company's performance, but most of the companies'executive's stakes are relatively low and can not play its due role. In the same year Yuan Guoliang and Wang Huaifang had an empirical analysis of the stock incentives of the listed companies. Their research result confirmed that the relativity between the stock incentive and the company performance is not strong. In 2003 Tong Jingjun considered that the implementation of the stock incentive have some effects to improve the performance of Chinese listed companies, but less obvious. Using the meters of the comparative analysis, Mi Haixia found that the performance of the listed companies that disclose stock incentive plan were significantly better prior to the disclosure, and better than the performance of the company who did not disclose stock incentive plans In 2008. Based on the research on the high-tech Industry Ye Jianfang and Chen Xiao found that the executive's stock has a positive impact on the companies'stock value. Overall, the domestic empirical research results show that before 2006 the conclusions to support the relativity between the senior management ownership and company performance are not strong, but after 2006 most of the conclusions to support a significant positive correlation between the two are strong. This also indicates that the internal and external conditions are changed better, like the China's corporate governance mechanisms and the shareholding reforms. The stock incentives'effect to promote enhancing of the companies'business performance has been gradually revealed.Most previous studies of the empirical research show the conclusions that there is no obvious relativity between the senior managers structure and corporate performance, or has been released by stock incentive plan (or implementation) of listed companies and not the implementation of incentive stock options the operating results of listed companies in both comparative analysis. Our researches argue for that the previous studies are lack of solid theoretical foundation, and it is difficult to conduct further in-depth analysis. Based on this, the paper aimed to seek stock incentive inherent theoretical logic point of view, Theory of Property Rights by reference view of enterprise type of breakdown. We analyzed the implementation of stock incentive options on the appropriate type of business, and through the sampling data, we did an empirical study to prove the correctness of theoretical perspectives. In this paper, we combined with theoretical and empirical research methods on the implementation of stock incentive for company types, and proved that private innovative companies in a growth stage is more suitable to stock incentive options to promote the business performance of the companies.In theory, in 90's of the 20th century, the Australian economist Tang Lang Thai, British economist Martin and Parker made their famous the beyond property-right theory. In 1996, Thai Tang Lang analyzed more than 80 articles on the property rights and the business performance and made major industries and companies in which the degree of competition. In 1997, the British economist Martin and Parker analyzed a variety of the UK privatized companies operating results through a large number of empirical studies, and concluded that to improve the ownership structure of the companies and to be in the full competitive industrial market is the prerequisites for enhancing company performance. In this paper, we present that the non state-owned innovative company is suitable for the stock incentives. Through implementation of the stock incentives, the non state-owned innovative companies further improve the structure of property rights to promote their business performance significantly.In the empirical context, with the data of the innovative listed companies announced the stock incentive plan from January 2006 to April 2008 in A-share market as samples, we analyze the stock incentive short-term effect on stock prices, using the event study methodology. And we also use the panel data analysis to study the relationship between the cumulative abnormal returns and the characteristics variables of the stock incentives of the sample companies when the announcement is published. After that we analyze the effects of the board of directors announced stock incentive plans to the stock prices and trading volume. We also analyze the effect of the stock incentives to the comprehensive ability of listed companies. Through the theoretical and empirical research, this paper has fully proved that the non state-owned innovative companies are more suitable for the stock incentives to improve business performance.Under the corporate life cycle theory, we put forward the point of view that the non state-owned innovative companies at the growth stage are more suitable for the stock incentives, thus expanding further the super-property rights theory as the theoretical support of the stock incentive scheme.Finally, according to the different stages of growth of the non state-owned innovative companies and Combining with the actual situation of ZTE and Huawei Technologies'stock incentive and the experience of Microsoft's stock incentive, we proposed the incentive model. And hope that the above study on the promotion of development of the non state-owned innovative companies-China's most-growth businesses types can have a real contribution.