Research On Influence Of Stock Option Incentive On Listed Companies' Inefficient Investment

As an important financial behavior and the significant means for realizing company value increase,investment can organically combine company's short-term and long-term benefits.In the microcosmic viewpoint,investment influences company's financing and dividend policy;from macroscopic perspective,investment also affects effective operation of economy in the whole country.In recent years,the rapid growth of Chinese economy cannot do without effective investment.However,not all investments are efficient since the rapid economic development in China also brought unbalanced economic progress;meanwhile,the issues such as ‘high demand for investment',‘repeated construction',‘over capacity' and ‘under investment'emerged in generally in listed companies,which reflect that the inefficient investment problems including blindness in investment and idle fund exist in listed companies.To be specific,the inefficient investment can be divided into over investment and under investment,among which the over investment wastes enterprise resources and cause unreasonable resource allocation,while under investment makes enterprise lose effective investment opportunity and influences enterprise development.For this reason,to seek for effective method to solve the inefficient investment of listed company is extremely urgent.The major cause of inefficient investment is the principal agency problem due to disagreed interest tendency between owners and managers;the effective way to solve this problem is formulating a set of effective incentive and supervision mechanism to relieve the agency conflict between stockholders and managers,so stock option incentive emerged.By means of endowing managers with stock rights,stock option incentive realizes the convergence of interest between stockholders and managers,which enables managers to share enterprise surplus value so as to relieve the problem of principal agency between stockholders and managers.Nevertheless,a series of problems such as incentive turning into welfare and executing window period appeared during the process of implementing stock option incentive.What about the implementation effect of stock option incentive,whether it can effectively suppress the inefficient investment of listed company?What are the differences in incentiveeffects of different stock option incentive methods? What is the influence of ownership property on the implementation effect of stock option incentive? All these problems remain to be further researched.Aimed at these problems,this paper summarizes domestic and overseas research literatures about stock option incentive and inefficient investment;based on previous researches,and through analyzing principal-agent theory as well as information asymmetry theory,it concludes the causes of inefficient investment in listed company;it analyzes the mechanism of action of stock option incentive via human capital theory as well as incentive theory;meanwhile,after analyzing the differences of distinct stock option incentive methods and influence of ownership property on stock option incentive effect,it proposes the research hypothesis,defines correlated variables according to the hypothesis and designs multiple regression model.On that basis,this paper selects the companies listed in A-share of Shanghai and Shenzhen during 2011-2015 as research example,which emphatically verifies the influence of incentive on inefficient investment of listed company,and compares the different effects between restricted stock incentive and stock option incentive.In addition,considering the particularity of state-owned listed companies,combining with ownership property,it tests the different influences of stock option incentive on the inefficient investment of stated-owned and non state-owned listed companies.The research conclusions are as follows:(1)The implementation of stock incentive can effectively relieve the principal agency between stockholders and managers,which obviously suppresses the over investment and under investment of listed company.(2)Compared with stock option incentive,restricted stock incentive is more obvious in inhibiting the inefficient investment of listed company.(3)The function of stock option incentive inhibiting over investment and under investment is stronger in non state-owned company than that in state-owned listed company.