Industry Regulation, Equity Incentive And The Listed Company Risk-taking

The level of risk-taking of the listed company concerns the company's performance and prospect and the national economy. As an important measure aiming to improve the level of risk-taking, equity incentive has been widely used in the company. The listed companies under regulation industry and non-regulation have different wills and purposes to implement equity incentive, then their risk-taking level is also different. This paper firstly aims to verify the relationship between equity incentive and risk-taking, and then analyzes the relationship between industry regulation and risk-taking from the theoretical and empirical view.Based on the Chinese 2006-2013 all non-financial and insurance companies for the study, the level of the listed company risk-taking as variable being explained, industry regulation and equity incentive as explained variable respectively, this paper try to test the relationship between equity incentive and risk-taking and between industry regulation and risk-taking. The results show that equity incentive reduces the level of risk-taking, another result is that industry regulation positively relates to the level of risk-taking. This conclusion helps to understand the link between industry regulation and the level of risk-taking and confirms the reasonableness and positivity of industry regulation, which is of great significance in decision-making and deepening the reform in regulation industry.