The Influence Of Senior Executive Equity Incentive On Capital Structure Adjustment

The decision of capital structure is the core content of corporate finance.It is related to the sustained and healthy development of enterprises.With the development of econometrics and the rise of the theory of dynamic balance of capital structure,the research on the adjustment of enterprise capital structure has gradually become a common concern in the academic and practical circles.This paper analyzes the influence of the capital structure adjustment from the perspective of senior executive equity incentive and the control of major shareholders.Firstly,I review the relevant literature on influential factors of capital structure adjustment,the relationship between senior executive equity incentive and capital structure,the impact of senior executive equity incentive on capital structure adjustment,and the impact of control of major shareholders on senior executive equity incentive effect.Secondly,I define the concept of capital structure adjustment,senior executive equity incentive and the control of major shareholders.I put forward this article hypothesis according to the principal-agent theory,incentive theory,dynamic balance theory of capital structure and the hypothesis of the tunnel effect.Next,I empirically investigate the impact of senior executive equity incentive on capital structure adjustment,by taking 2007-2016 years A listed companies in Shanghai and Shenzhen two cities as research samples,and using standard partial adjustment model and multiple regression equation.Considering that the ownership structure of China's listed companies has the characteristics of "A single share",I further examine the regulatory effect of the major shareholders' control on the above research by introducing the control variables of the major shareholders.The conclusion shows that senior executive equity incentive has a positive impact on capital structure adjustment,that is,the greater the senior executive equity incentive is,the faster the capital structure will adjust to the target capital structure.After differentiating debt levels,I find that the positive impact of senior executive equity incentive on capital structure adjustment is asymmetric,that is,the positive impact of senior executive equity incentive on capital structure adjustment is more significant under high debt level.Thecontrol of major shareholders have a negative moderating effect on senior executive equity incentive and capital structure adjustment,that is,the greater the proportion of major shareholders,the weaker the willingness of executives to adjust their capital structure,and the slower the capital structure will adjust to the target capital structure.After differentiating levels of liabilities,I find that the negative moderating effect of major shareholders' control is asymmetric,that is,under the low debt level,the negative moderating effect of major shareholders' control on senior executive equity incentive and capital structure adjustment is more significant.Consideration the influence of property right,I find the senior executive equity incentive has a more positive impact on capital structure adjustment in state-owned enterprises,and the control of major shareholders have a more negative moderating effectthe in non state-owned enterprises.Finally,I put forward the relevant countermeasures and suggestions according to the results of the study.