Executives Shareholding Motivation And Environmental Investment Ofprivate Enterprises

With the continuous strengthening of China’s environmental regulations and the increasing awareness of environmental protection of citizens,the cost of environmental pollution is gradually internalized.As the main polluter,enterprises should further improve their investment level of environmental protection.In view of this,this paper attempts to explore empirically whether the internal governance mechanism of stock ownership incentive of senior executives can play a role in promoting private enterprises’ environmental investment from the perspective of senior executives,who are the main decision-makers of enterprises.This paper takes the listed companies in A-share heavily polluted industry in 2013-2018 as the research sample,combines the principal-agent theory and executives’ self-interest behavior,puts forward the competitive hypothesis,designs an empirical model,tests the relationship between executive stock ownership incentive and environmental protection investment of private heavy pollution enterprises,and finds that executive stock ownership incentive significantly promotes the level of environmental investment of private heavily polluted enterprises.From the perspective of non-financial decision-making,the above conclusion shows that executive stock ownership incentive promotes the consideration of long-term interests of executives,realizes the convergence of interests between executives and shareholders,and embodies the best contractual effect of equity incentive.In addition,this paper examines the differences in the level of environmental protection investment among executives under the two different levels’ external governance mechanisms — environmental regulation and product market competition.It was found that the promotion effect of executive shareholding incentives on the environmental protection investment of private enterprises only exists in samples with weak environmental regulations and fierce competition in the product market.In regions with strong environmental regulations,executive shareholding incentives have no significant influence on the environmental investment of private enterprises.Moreover,product market competition and the internal governance mechanism of corporate executives’ shareholding play a complementary role in promoting the environmental investment of private enterprises.In a highly competitive industry,the incentive role of corporate executives’ shareholding is more significant,which proves that superiority of corporate executives’ shareholding.The research in this paper enriches the research on the driving factors of environmental protection investment,and illustrates the effectiveness of the corporate executives’ shareholding on alleviating the principal-agent problem from a non-financial perspective.