Research On The Synergistic Influence Of Executive Incentives And Social Responsibility On Corporate Financial Performance

A lot of enterprises have taken maximization of the profit as their goal.Driven by this goal,the enterprises expand their scale,increase their production and reduce their costs blindly.They are pursuing short-term profits blindly and completely ignore the responsibilities to other stakeholders,leading to the food Poisoning,environmental pollution,tax evasion and so on.Lacking of corporate social responsibility is also increasingly concerned by all parties.In recent years,our government and related organizations have promulgated a series of laws and regulations to supervise and urge enterprises to fulfill their social responsibilities with little success.Most of the enterprises in our country Lack of active awareness to fulfill their social responsibilities.They think that undertaking social responsibility will result in the waste of human,material and financial resources,increase business costs,which adversely affect the business to improve financial performance,then undertaking social responsibility will affect the financial performance of enterprises?In the end what kind of impact will have?Furthermore our country is in the process of transition economic and rapid development.The company has paid unprecedented attention to human resources.Most of the company's business decisions(including social responsibility)are made by executives.In order to make the personal goals are consistent with business goals,the common practice is executive incentive,do executive incentives really improve business financial performance?Will the relationship between social responsibility and financial performance be influenced by executive incentives?This article intends to use empirical research to explore the above problems,with a view to provide some reference for our country to promote corporate social responsibility.The paper is divided into six parts,the content is as follows:First of all,it elaborates the research background and significance of this article,and explains the research methods,research contents and innovations of the research.Then,after reviewing a large number of related literature,this paper combs the results of domesticand foreign research.Based on the analysis of principal-agent theory,incentive theory,interest-related theory and social contract theory,this paper chooses the data of shanghai A-share manufacturing listed company from 2014 Year-2016 as a sample of the study,empirically test the impact of executive incentive and social responsibility on the financial performance of enterprises and their synergistic effect on business performance.The findings are as follows:(1)There is a significant positive correlation between executive incentive and corporate financial performance.The higher the percentage of senior executives holding,the better the financial performance of the enterprise,the higher the net book value.(2)There is a significant positive correlation between social responsibility and corporate financial performance.The positive change of corporate social responsibility can significantly improve the financial performance of enterprises.(3)Social responsibility can promote the positive relationship between executive incentive and long-term corporate financial performance to a certain extent.With the increase of social responsibility,this regulatory enhancement gradually diminishes until it becomes a regulatory weakening effect.Compared with the non-fulfillment of corporate social responsibility,executive incentive to corporate long-term financial performance of the positive relationship in the initiative to fulfill social responsibility of the company to become even more pronounced.(4)In a certain range,executive incentive can promote the positive relationship between social responsibility and financial performance,and with the increase of the proportion of senior executives holding shares,the regulatory enhancement gradually diminishes until it becomes a regulatory weakening effect.The positive effect of social responsibility on the long-term financial performance of enterprises is more significant among the top-holding companies than that of the non-holding companies.Finally,with the results of this article,we put forward corresponding policy recommendations to guide enterprises through the development of a scientific and rational remuneration system to influence and constrain the behavior of executives,prompting them to form a correct view of social responsibility,take the initiative to assume social responsibility,based on the enterprise Long-term development,enhance corporate value.The research in this paper enriches the research contents of social responsibility and makes some theoretical contributions to the research on the relationship among the three factors:executive incentive,social responsibility and corporate financial performance.The research in this paper also provides empirical evidence for the analysis of social responsibility can promote long-term development of enterprises,which has important enlightenment and practical significance for promoting the awareness of social responsibility to corporate,proactively fulfilling social responsibility and using equity incentive rationally.