Listed Company Equity Incentive Impact On Investment Intensity

According to "listed company equity incentive management measures (Trial)" as thebackground, which was issued by the China Securities Regulatory Commission inDecember31,2005, this paper takes the implementation of equity incentive plan of theboard and the board of SME from2006to2010as samples, combines the normativeresearch and empirical research and tests the relationship between the equity incentivestrength, equity incentives and corporate investment decisions.First of all, this paper elaborates the research background and the significance. Thenthrough reviewing the equity incentive related research achievement at home and board, itanalysis the inadequacies of the study, which is proposed to the point of this paper, at thesame time, it describes the methods of research.Secondly, this paper makes the definition of the related concept, including theinvestment intensity, equity incentive intensity and equity incentives. Then it expounds thetheoretical basis, principal-agent theory, human capital theory, asymmetric informationtheory, corporate investment theory and incentive theory of constraints included, and thesetheories for the mechanism of action of the equity incentive and investment decisions.Next, this paper analysis the equity incentive and investment status quo of the listedcompanies in the implementation of equity incentive. The results show that, the listedcompanies in the implementation of equity incentive plan shows the increasing trend, theimplementation of equity incentive of listed companies has obvious characteristics of theindustry, SMEs become the main body of the implementation of equity incentive plan, theimplementation of equity incentive listed companies show Privitization trend, equityincentive intensity is gradually stabilizing, stock options become the preferred equityincentives and restricted stock is gradually favored, private placement of equity incentivebecomes the main source of the underlying stock, investments in the implementation ofequity incentive are showing varying degrees of growth trend.Then, it tests the influence of the equity incentive on the corporate investmentintensity. This part is mainly from two angles of the equity incentive strength and equity incentives, to study the equity incentive impact on investment intensity. The results showthat: the greater the equity incentive intensity, the greater the intensity of investment, thatis equity incentive intensity and investment intensity has a significant positive correlation.Equity incentives and investment intensity are positively correlated, but not significant.Last but not least, it puts forward the conclusion and according to the conclusions ofthis study, it can provide suggestions about equity incentive program designed from fourangles, that is, incentive target, equity incentive intensity, equity incentives andperformance appraisal system to promote the enterprises to achieve a rational investment.