The Influence Of Gneneral Manager’s Implicit Incentive And Corporate Performance And Risk

The competence of our enterprises have developed quickly since the reform andopening-up.It dues to the ability of the managers.The managers’ effort make a significantimpact on the development of the enterprise.The study of the incentive theory are so much,butmost of them are about the explicit incentive.However,the explicit incentive have been provedthat is not a perfect and effective contract that can solve the Principal-Agent.So,manyresearchers focused on the study of the implicit incentive.This paper define the implicitincentive as followed:first,good reputation incentive which made managers achivedself-development;second,the threatening of being replaced that is the result of bad operatingperformance. The previous study of the implicit incentive were made focus on the building ofthe mechanism and the importance of implicit incentive,that rarely focus on the correspondingof the implicit incentive and enterprise performance and risk.We select four implicit incentivefactors,including the age,tenure,education level, sex of the general managers’. We build theincentive model,which is used for estimating the integrated influence of implicit incentive tothe enterprise performance and risk,and makes in-depth study to sate-owned and privateenterprise because of the lack of owners.We get several conclusions through the study. First, in the overall sample, the tenure ofgeneral manager is negatively correlated with company performance. Meanwhile, theeducation degree and the age are positively correlated with firm performance. The generalmanagers’ age and tenure are negatively correlated with enterprise Risk.The education degreeis positively correlated with firm risk.Secondly, during the comparative study of state-ownedand private enterprises, we find that the tenure of general manager in state-owned enterprisesis significantly negative with the companies’ EPS which is not obviously in the privateenterprises.The general managers’ is in negative relation with the companies’ performancewhich is not different between state-owned enterprises and private enterprises.However,thecorrelation is not obviously in state-owned enterprises.