Executive Compensation、Internal Control And The Relationship Between The Inefficient Investment

Owners and operators combined in classical enterprise,corporate ownership and control has always maintained complete reciprocity relations.However,in the modern enterprise,the separation of management and ownership,the owner will delegated rights and decision-making power to professional managers,both of which appeared inconsistent with the pursuit of the interests,the agency problem caused by inefficiency of investment.Lack of ownership of state-owned enterprises made inefficient investment more widespread.State-owned enterprises play an important role in our economic sphere. It is necessary to maintain state-owned enterprises stable and healthy development. Executive compensation is an important bridge between owners and management relations,alleviating the agent problem and improving the effectiveness of investment decisions.Internal controls as another important mechanism for supervision and restraint, able to bind the behavior of senior executives of private interests,Therefore,executive compensation,internal controls and state-owned inefficient investment integrated into the same framework research has certain practical and theoretical significance.This paper takes listed state-owned companies from Shanghai and Shenzhen from 2011 to 2014 as a samples,mainly study inefficient investment,Firstly,make use of the Richardson(2006) measure the level of investment business model,and then build four model test research the relationship between executive compensation and state-owned enterprises inefficient investment,internal control and state-owned enterprises inefficient investment,the impact of executive compensation on internal control,final inspect internal control in executive compensation and inefficient investment in state-owned enterprises.The empirical results show that:(1)Executive compensation can inhibit the efficiency of state-owned enterprises to invest,whether it is over-investment or under-investment,it can play a certain extent role,ease the excessive or insufficient state investment;(2)Internal control and state-owned enterprises inefficient investment negatively correlated with high-quality internal control can suppress state-owned enterprise inefficiency investments;(3)Executive compensation could improve incentive executives positive internal control information,and improve the quality of internal control over state-owned enterprises;(4)Internal control in executive compensation and state-owned enterprises inefficient investmen play mediate part,effective executive compensation incentives could improve the internal control of enterprises,it suppress efficiency investments more better.Finally,according to the conclusions of the study,the paper concludes policy suggestions to the enterprise.This study opens up the internal control as mediator of a new perspective,enrich the existing literature on executive compensation and investment efficiency influencing factors,investment efficiency is an important study of literature and useful complement, And we wish provide a theoretical basis for further research, provide a reference for social investors of state-owned enterprises and investment decisions of executive compensation control.