Equity Incentives,Inefficient Investment And Corporate Performance

With the continuous improvement of the market level and increasingly fierce competition,Chinese companies are continuously striving to find ways to improve corporate performance in order to enhance their competitiveness.At the same time,investment activities as the company's main activities have an important impact on corporate performance.However,at present,there are widespread problems of underinvestment or overinvestment within the Chinese enterprises.The blind management of investment decisions has always existed,which has made China's corporate investment inefficient and has directly weakened the company's competitiveness and profitability.Therefore,how to restrain inefficient investment and how to improve corporate performance has become a hot topic in the academic and practical world.As a long-term incentive mechanism,equity incentive can effectively solve the principal-agent problem.However,whether the implementation of equity incentives can curb corporate non-efficiency investment,whether it can improve corporate performance,and whether it can indirectly improve corporate performance by inhibiting non-efficiency investments needs further verification.After combing and summarizing the literature on equity incentives,inefficient investment and corporate performance both at home and abroad,this article put forward the assumption of the interrelationship between the three based on related theories.After that,a linear regression model was established to empirically analyze the 5,424 sample data of China's A-list private listed companies from 2011 to 2016.Through analysis,it is found that there are widespread non-efficiency investment problems in China's private listed companies;implementation of equity incentives can inhibit non-efficiency investment behaviors and improve corporate performance;inhibition of non-efficiency investment behaviors can help improve corporate performance;Non-efficient investment through the "equity incentives-inefficient investment-corporate performance" path has an impact on corporate performance,in which non-efficient investment plays a partial intermediary role.Finally,this article has made targeted recommendations to provide a reference for China's enterprises to improve the incentive system and improve investment efficiency and corporate performance.