The Influence Of Private Equity Investment And Executive Compensation On The Growth Of The Small And Medium State-owned Enterprises

In a complex and changeable environment,the survival and development of SMEs face many challenges,capital and management bottlenecks tend to make SMEs in trouble.In the context of the rapid development of China's capital market,private equity investment has become a new channel to solve corporate finance.More and more SMEs expect to alleviate financial difficulties and obtain more resources by obtaining investment from private equity institutions.Therefore,the impact of private equity investment on the growth of the company deserves more attention.In recent years,scholars began to study the impact of private equity investment on the development of the company,but there is no consistent conclusion about the path and mechanism of its impact.This paper studies the impact of private equity investment on the growth of SMEs,analyzes the intermediary role that senior executives play in compensation incentives,provides some theoretical support and experience for SMEs in the process of introducing private equity investment and post-investment management,in order to further enhance the vitality of their own businesses.Based on the review and reference of domestic and foreign literatures,this paper takes into account the theories of principal-agent,certification and verification,reverse selection and management incentive,then summarizes and analyzes the relevant literatures about private equity investment,executive compensation and company growth,and then review the literatures.Based on the theoretical analysis,the empirical test and the way of putting forward the suggestion,the paper takes the data of the companies listed on the SME board and the GEM from 2014 to 2016 as the research sample and adopts the multiple linear regression analysis method to explore the impact of the private equity investment on the company's growth and the role of executive compensation as an intermediary in the process of private equity investments affecting the company's growth.The research found that:(1)Companies with private equity background have better performance than those with no private equity background.(2)There is a significant positive correlation between the shareholding ratio of private equity investment institutions and the company's growth,so does the joint venture investment and the company's growth,while the investment duration has no significant effect on the company's growth.(3)Executive compensation plays a part of the intermediary role in the impact of private equity investment on the growth of the company and the impact of the joint investment on the growth of the company,while there is a masking effect in the impact of the shareholding ratio on the company's growth has an intermediary role,and does not play a significant intermediary role in the investment period affecting the company's growth.Private equity investment with the help of the professional management teams in the board of directors,the bank designed a reasonable remuneration system to optimize the corporate governance structure and further promote the company's growth.