Research Of Executive Compensation Contract And Financing Constraints

Financing constraints is always a difficult problem which influences the development of the enterprise management,how to alleviate the financing constraints has been one of the problems that scholars pay attention to and research.In the credit market,capital demanders hope to get enough money,and want to minimize the cost of financing,capital providers hope to reduce the risk of default,recover of the cost timely,and expect to get maximum benefit.Because of the capital supply and demand information asymmetry,the market resources allocation efficiency is low,making financiers enterprise financing cost is high,what's worse,some companies cannot get enough money even if they are willing to pay more high interest rates.Owing to this kind of information asymmetry,capital suppliers face to greater credit risk,they cannot recover the credit founds or defining assets are moved for other way,leading to the risk of default.Executive compensation contract mechanism as the important measure of corporate governance,has a profound influence on corporate financing constraints.Executive compensation contract mechanism can reflect the executives of the interior of the non-financial information and enterprise investment project.On the one hand,Reasonable executive compensation contract mechanism can transmit positive signal of the development of the company to the market,relieve the adverse selection and moral hazard problem,this can ensure the safety of credit funds of the creditor,alleviate the financing constraints,this mechanism also help establish long-term credit relations of two side.On the other hand,Executive compensation contract will enable the enterprise to reduce principal-agent cost and reduce the self-interested behavior of executives,thereby helping to improve enterprise performance,improve the enterprise value.Therefore,if there is a relationship between financing constraints and executive compensation contract? Executive compensation contract whether can alleviate the financing constraints,especially the financing difficulties of private listed companies issue? Executive compensation contracts would be able to make the financing constraints of company get more bank loans and commercial credit? In order to solve this problem,this paper research this problem,expecting to alleviate the financing constraints of enterprises to provide guidance.This article first to the domestic and foreign research literature of executive compensation contracts to the financing constraint problem analysis,on the basis of the study,this paper define the relevant variables.On the basis of the principal-agent theory,signaling theory,asymmetric information theory and incentive theory,the research hypotheses are put forward.We select research samples from 2010 to 2015 Based on the Shanghai and Shenzhen A-share listed companies,We empirically test of the executive compensation contract mechanism on corporate finance constraints,on the basis of this,we select two variables of the nature of property rights and market degree.Exploring different properties and different market whether has impact on the relationship between two side.Further,executive compensation contracts can make enterprises get more bank loans financing constraints or commercial credit.The study found that:(1)The executive compensation contract incentive mechanism will help reduce the degree of financing constraints;(2)Compared with state-owned listed companies,executive compensation contract mechanism can be more effective in relieving credit discrimination of private listed companies,compared with high degree of market,executive compensation contract mechanism has more significant effects on financing constraints in low market regions.(3)The executive compensation contract mechanism can make the listed companies get more bank loans and commercial credit.