Research On Equity Incentives In Chinese Construction Companies: Mechanism And Effec

The construction industry is the core sector of material production for the entire national economy.In recent years,national policies have further tightened the requirements for the supervision of construction projects in the course of and after the event,and for the quality of contracting work.For the control of the process of projects and the quality of contracting,construction enterprises are required to continuously optimise their equity governance model,improve the efficiency of corporate governance and establish an efficient governance system.As an important means of equity governance,it is necessary for construction enterprises to actively explore international and industry-leading equity incentive mechanisms to serve equity governance.In this context,this paper analyses the operational mechanisms and implementation effects of equity incentives in Chinese construction industry enterprises.As equity incentives are complementary to other instruments of equity governance in construction enterprises,this paper combines the classical and emerging theories on equity incentives and equity structures from various perspectives,both domestic and international,to form the theoretical basis of this research.Based on the theoretical foundation and previous practical experience,this paper starts a systematic study from two levels,including:(1)Based on the relevant equity theories,it proposes the target model and implementation path of equity incentive,discusses its rationality,then further designs the optimal incentive mechanism for project leaders of construction enterprises when considering the situation of ex post and ex post supervision,discusses the specific application of equity in the corporate governance of the construction industry,and specifically designs(2)Collecting firm-level data,discussing the application of equity to corporate governance in the construction industry,and designing a specific inter-term restricted stock incentive contract for project leaders.(2)To collect firm-level data and discuss the practical role of equity incentives in corporate governance in China’s construction industry at this stage,in terms of their impact on both financial performance and governance effects.Through the research,the following important conclusions and suggestions are obtained :(1)the effort level of the intertemporal project leader plays a decisive role in the incentive effect of restricted equity incentive contracts,and the project leader should define the opportunity cost of his own investment to determine the optimal effort level;The market direction has a great influence on the equity incentive plan of project leaders in construction enterprises.Construction joint-stock enterprises should evaluate the dynamic changes of the market background and design scientific equity incentive contract rules.(2)The client’s direct incentive to the project leader’s project quality efforts is effective,and the client’s indirect control over his self-seeking behavior is effective;Improving post-supervision inspection standards and project acceptance standards can reduce the negative impact of the project leader’s seeking personal gains on the client’s profits.In the process of equity governance of joint-stock companies in the construction industry,improving project acceptance standards and establishing a perfect performance appraisal system are important ideas to optimize equity incentive results,which provided a solution and implementation path for equity incentive of private construction companies.In other words,when the company makes restricted stock incentive plan,it should appropriately enhance the incentive strength of observable efforts of project leaders according to the scientific performance appraisal system.Improve post-supervision and project acceptance standards to avoid speculation with asymmetric information.(3)Equity incentives have a catalytic effect on the performance of Chinese construction enterprises,which is manifested by improving the innovation efficiency of enterprises and reducing the financing constraints of enterprises to promote the performance of enterprises.(4)Equity incentive promotes the internal governance of Chinese construction enterprises,and equity incentive improves the total factor productivity of enterprises by enhancing the efficiency of internal governance;equity incentive promotes the external governance of Chinese construction enterprises,and equity incentive improves the value of enterprises by enhancing the efficiency of external governance.