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The Empirical Study Of Stock Encourage And Performance Of Company After The Split Share Structure Reform In China

Posted on:2011-05-29Degree:MasterType:Thesis
Country:ChinaCandidate:Y F ZhouFull Text:PDF
GTID:2189360308982794Subject:Financial management
Abstract/Summary:PDF Full Text Request
Equity-based incentives is a new mode of management and incentive distribution system. It does this by way of agreement for operators to have a certain amount of shares the company, so that the operator's role transform from merely an agent to manager and owner, and thus link the goals and interests of owners and managers. A certain extent, equity-based incentives can solve the principal-agent problem enterprise managers to make business managers more concerned about the long-term development of enterprise value maximization.Equity incentive since the 20th century 50s, they were widely used in developed Western countries in modern corporate governance practice, in solving the principal-agent problem has achieved great success. In China, lagging behind the development of equity-based incentives, in the early 90s of last century, our country have its first trial of the company's equity incentive systems-Shenzhen Wanke Group. At the same time, China's relevant laws and regulations of the imperfect, and the stock market tradable specific conditions, severely hampered equity incentive system in the use of listed companies in China.As China's rapid economic development, the original constraints of China's economic development, regulations, and systems have been gradually abolished, broken, a series of relevant laws and regulations have been introduced. In 2004 the State Council's "Company Law" revised draft, modify, restrict enterprises to implement many of the operators of the provisions of equity-based incentives. April 29,2005, the CSRC issued the "split share structure of listed companies on the reform issues related to notice", China's share-trading reform started. January 1, 2006, the newly amended "Company Law" and "Securities Law" into effect, further equity incentive system, policy and legal obstacles to clear. Meanwhile, the China Securities Regulatory Commission promulgated the "Regulations equity incentive listed companies," provisions have been completed split share structure reform of listed companies to implement equity-based incentives, establish a sound incentive and restraint mechanisms. December 6,2006, the SASAC promulgated "state-owned holding listed companies (domestic) implementation of equity incentive pilot scheme," the implementation of equity incentive policies laid the necessary legal basis, the equity incentive system in China's implementation of the epoch-making significance.In this context, this paper select the split share structure reform of listed companies to implement equity-based incentives as an object of study, the use of principal-agent theory, human capital theory, incomplete contract theory and transaction cost theory and other related principle, the relationship between corporate performance and equity-based incentives empirical analysis, a comprehensive description of the status quo of China's listed companies, equity-based incentives and found the problem, concludes with practical policyChapter I Introduction. This article begins by describing the research background and significance, followed by the proposed purpose of this research and possible contribution to the final presentation of the ideas and methods in the study.Chapter II Theoretical basis and literature review. The theoretical basis of equity-based incentives include principal-agent theory, human capital theory, incomplete contract theory, transaction cost theory. Principal-agent theory is the basic theory of origins of equity-based incentives, namely, production of equity-based incentives was primarily due to the interests of executives and shareholders, the responsibility of different risk resulting from principal-agent problem. Of human capital theory suggests that in the era of knowledge economy, human capital in economic growth played a key role, while equity-based incentives is the affirmation of human capital theory. Incomplete contract theory suggests that, due to a certain degree of limited rationality, or transaction costs, making the reality of the contract is incomplete. In the incomplete contract conditions, the agent will not only explicit contractual provisions in accordance with the agreed criteria to determine its own efforts to return the degree of the implicit contract terms will also be an important motivating factor. Transaction cost theory suggests that companies should not only emphasize the productive nature of their transactions have been ignored, namely, emphasis on enterprise system, structure or property arrangement. In order to reduce transaction costs, corporate managers as a mergers and acquisitions should be an object, through equity-based incentives, enterprise management personnel to internalize and become an integral part of business. Literature review reviews the domestic and foreign companies the relationship between performance and equity-based incentives a major empirical research literature, and a comparative analysis of the literature, its main features are very different conclusion of the study sample, variable selection, as well as the selection of empirical methods have different and so on.Chapterâ…¢The equity incentive effects of the formation mechanism. First introduces the definition and types of equity-based incentives, this paper will stimulate equity incentive type of objects in accordance with the rights and obligations and incentives underlying patterns were divided into two categories, with specific description of each category under the equity incentive model. Then from the internal factors and external transmission mechanism is focused on analyzing two aspects of the formation mechanism of effect of equity-based incentives. Of factors, including in the analysis, primarily through the principal-agent theory, human capital theory analysis of why the equity-based incentives can affect the behavior of operators; external transmission mechanism is the point of view from the stock market analysis stock message on the impact of the operators and the implementation of equity-based incentives necessary.Chapterâ…£Tradable share reform of listed companies in China before and after the analysis of equity-based incentives. First, a brief introduction of the share reform of listed companies in China before equity incentive situation, and describes the economic context at the time, China's listed companies, the obstacles encountered in the implementation of equity-based incentives. Followed by analysis of the split share structure reform of listed companies in China to clear obstacles to equity-based incentives and benefits:addressing the long-troubled by China's capital market development in non-tradable shareholders and tradable shareholders fragmentation problems, solve the equity-based incentives stock sources, a rational pricing mechanism will help the stock return is conducive to establishing and improving the company's management incentive and restraint mechanisms. Final description of the share reform of listed companies in China after the status of equity-based incentives for these companies'regional distribution, industry distribution, holding category, and the choice of incentive model was descriptive statistics.Chapter V Share reform of listed companies in China after the relationship between performance and equity-based incentives for empirical analysis. Core part of this article.1. Research hypothesis under the equity incentive effects of the formation of internal factors, ask a hypothetical one, the listed company's financial performance and equity incentive equity ratio were significantly positively correlated; according to the external transmission mechanism, proposed by hypothesis 2, the listed company's financial performance and the value of equity incentive there is a significant positive correlation.2. Research and design options from January 1,2005 to December 31,2008 the implementation of equity incentive companies as samples to the proportion of equity-based incentives and equity-based incentives and the value of independent variables, company performance as the dependent variable, while the size of selected companies, capital structure, holding the class of control variable modeling.Chapter VI Conclusions and recommendations by empirical research, the main conclusions are:1. China's listed companies after the implementation of equity-based incentives than before the implementation of corporate performance is obviously improved.2. Equity incentive value and net capital gains rate was significantly positively correlated, indicating equity-based incentives to the operators of the additional remuneration for the more the better business performance of enterprises.3. Equity incentive ratio and net capital gains rate was significantly positively correlated, indicating that company's equity incentive plans of the shares granted to employees in the company's total share capital the greater the better the performance of enterprises.Finally, the use of relevant theoretical and empirical analysis, from the management and the company's own point of view, put forward policy recommendations:to strengthen the construction of the capital market and improve relevant laws, regulations and policies, the formulation of scientific equity incentive system, improve corporate governance structure, and establish a scientific performance appraisal system, and the building of effective management market.Possible contribution of this paper is mainly reflected in:1. The effect of equity-based incentives into the internal mechanism of the formation mechanism'and the external transmission mechanism, from the perspective of the securities market to analyze the effect of equity-based incentives formation mechanism, in order to lay the theoretical foundation for model building.2. In the analysis of equity incentive levels, not only analyze the company's equity incentive stock granted to the operators, so that operators have to bring the incentive effects of residual claims, while also taking into account incentive effects caused by return on equity. And in the model construction and should be set at the same time the two explanatory variables to observe their performance impact.3. Study carried out under the new context. Select a stock to change the beginning to the end of 2008 the implementation of equity-based incentives for companies as samples, the data up to date at the same time, make policy recommendations with a strong time-sensitive.Shortcomings in this article are:1. The sample selection. As the study of the paper after the split share structure reform based on the implementation of equity-based incentives to market, so the number of samples is only 31, representing the proportion of all the listed companies of China's small. To the entire securities market, the limited persuasive. With the stock reform of the conduct and improvement of relevant laws and regulations, the implementation of equity incentive companies will more and more future research can expand the number of samples to increase the empirical results convincing.2. The performance of the corporate, including operating performance, organizational performance and financial performance. Since the former two metrics hard to quantify, this paper does not study them in depth, only the financial performance of selected empirical analysis, so this paper an empirical model to be further improved. 3. In the variable selection, since the sample size small, without considering the size of the industry, risk factors, growth, as well as some external factors in the selection of control variables in need of further study.
Keywords/Search Tags:equity incentive, corporate performance, split share structure reform
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