Research On The Relationship Between Executive Incentive And Dynamic Adjustment Of Capital Structure

Capital structure has always been a hot topic in the field of financial management researchsincethe classical MM theory has been put forwardin1958,anduntilnowscholars from various countries have never stopped the development and deepening of capital structure research.During the process of exploration,scholars have gradually formed a series of classic theories,such as the static balance theory,pecking order theory,principal-agent theory and dynamic trade-off theory.And now with the development of empirical research methods,testing the optimal capital structure is also gradually to test the development of the research on influence factors related to the speed of capital structure adjustment,in addition to a number of objective factors,capital structure adjustment may also be influenced by the subjective willingness of the executives.As is known to all,executives have the final decision-making power of capital structure,they have the right to directly affect theadjustment process and speed of capital structure.However now,in our country,statistics show that the optimization and adjustment speed of enterprise capital structure is lower than that of western developed countries.Therefore,it is important to enhance the enthusiasm of executives for capital structure adjustment.According to the principal-agent theory,incentive measures can effectively alleviate such contradictions between shareholders and managers.From the perspective of executive incentive intensity,this paper studies the relationship between promotion intensity and capital structure adjustment speed in a suitable range.Based in 2006-2016 China's Shanghai and Shenzhen main board listed companies' executive compensation as the research object,using dynamic panel dataanalysis method,this paper to investigate the relationship between executive incentive and capital structure dynamic adjustment.The results show that the motivation of executive promotion is consistent with the expectation of dynamic tradeoff theory and tournament theory,and the adjustment speed of capital structure is positively related to promotion incentive intensity.And at the same time,under the special property right background of our country,the effect of state-owned enterprise executive promotion is weaker than that of private enterprise.This paper is divided into six parts:The first part is the introduction.This part is the construction phase of the main background frame of the article,including the following aspects:research background,research purpose,research significance(theoretical significance and practical significance),research methods and ideas and innovation of this paper.The second part is literature review.This part reviews the early classical theory of capital structure and the theory and method of modern capital structure dynamic adjustment,and the related research of executive promotion incentive,which lays a theoretical foundation for the empirical research.Review the research methods of capital structure adjustment speed and prospect the following research.The third part,theoretical analysis and research hypothesis,this part mainly includes the definition of relevant concepts,the overview of the existing capital structure theory,and finally,based on the relevant theoretical basis,the research hypothesis of this paper is put forward.The fourth part,research design.This part is the key structure of empirical research.It includes the construction of model based on research hypothesis,the definition and quantification of variables,the selection of sample data and the method of data regression analysis.The fifth part is empirical analysis and results.Through descriptive analysis,correlation analysis and regression analysis,this part tests the rationality and rationality of the hypothesis,reveals the law of variation,and supports the conclusion of the article with the result of regression data.This part also includes the robustness test,through the replacement of the promotion incentive measurement variables,re empirical test of this article,once again proved that the proposed variable relationship rules established.The sixth part,conclusion.Through the research results,this part provides reasonable suggestions on the form of executive promotions and the adjustment of capital structure,and looks forward to the future research.Accordingto the results,we comeupwith following recommendations:(1)Improve the executives' on job consumption disclosure system.(2)Formulate a more complete incentive mechanism.(3)Improving executive compensation disclosure system.(4)The state-owned enterprises should pay more attention to the performance of the top managers in the daily operation of the enterprise.