The Nature Of Property Rights, Executive Incentive And Inefficient Investment

Investment decision-making, as one of the most important financial decisions, has received extensive attention. The company’s management has a greater discretion in investment decisions. According to the principal-agent theory and asymmetric information theory, on the one hand, executives may on net present value for investment projects investment and expectations by expanding the scale of the enterprise to increase the private benefits of control, in order to gain enough personal income to offset the cost to pay for new projects, resulting in over-investment of enterprises; on the other hand, when private cost is much higher than that of private benefits can be obtained, executives will resolutely give up the net present value of investments, resulting in under-investment; at the same time, the information asymmetry between shareholders and executives also contributed to the executives of the adverse selection and self-serving behavior, causing inefficiency investment of the enterprises. According to the incentive theory, a reasonable and effective incentive mechanism can improve the enthusiasm and initiative of executive work, so that the interests of executives and shareholders tend to be consistent, thereby inhibiting the inefficient investment behavior. In 2014, the pay reform of state-owned enterprises has been paid much attention. In this background, the research on the influence of executive incentive on inefficient investment has a certain theoretical and practical significance.This article through to the domestic and foreign literature combing, the management, the management incentive and the non-efficiency investment concept limits, as well as the principal-agent theory, the information asymmetry theory and the incentive theory elaboration, proposed the corresponding hypothesis. In order to further test the hypothesis, this paper makes an empirical analysis. Through descriptive statistical analysis, the overall situation of the current inefficient investment and incentive of China’s listing corporation; through correlation analysis and multiple regression analysis, the first test of executive incentive for the overall impact of the efficiency of investment, the samples are divided into state-owned and non-state-owned groups, whether the different inhibitory tendency test for different property company executives incentive the efficiency of investment, the state-owned group in accordance with the actual control of the identity attribute and administrative property are different, further subdivided into government control and state-owned corporate control of the listing corporation, central control and local control of the listing corporation, the company executives incentive test different actual controller the restraining effect whether there are differences in extent.The empirical results show that executives monetary incentive to inhibit the inefficient investment of enterprises, and the current executive equity incentive in China’s listing Corporation have inefficient investment of enterprises play its restriction; state-owned listing Corporation tend to over investment, while non state-owned listing Corporation tend to lack of investment, reasonable executive currency incentive compensation can effectively restrict the over investment of state-owned listing Corporation, alleviate the shortage of non-state-owned listing Corporation investment; according to the two different way to divide the nature of the actual controller, executives monetary incentive compensation for government control (including the central and local government control), local control (including local government and local state owned corporate control) suppression the listing Corporation over investment.