Research On The Effect Of Managerial Equity Incentives On Enterprise Investment Efficiency

At present,the economic development vitality of our country is unprecedentedly high.While achieving the expected economic growth target,China’s investment enthusiasm is also constantly enhanced.Considering the situation,this year’s Report on the Work of the Government takes stock of the situation and puts forward the general requirement that China’s economy should maintain high-quality development between change" and "stability".High-quality economic development is necessarily based on rational allocation of market resources.Therefore,rational allocation of enterprise resources will be of great significance to China’s economic development.The investment activities of enterprises,as one of the activities that directly affect the allocation of enterprise resources,have very important research significance.The main purpose of this paper is to explore the effect of managerial equity incentives,as a tool to coordinate the interests of owners and managers,on the investment efficiency of enterprises in different stages of enterprise development.This paper selected the Shanghai and Shenzhen a-share manufacturing listed companies from 2013 to 2017 as the research sample,and adopted the executive shareholding ratio as the substitution variable of managerial equity incentives.Firstly,the static correlation between managerial equity incentives and enterprise investment efficiency is studied.Then,taking enterprise life cycle,which in this paper is divided into three stages:growth stage,maturity stage and decline stage into consideration,this paper realizes the dynamic analysis on the correlation between managerial equity incentives and enterprise investment efficiency.This paper comes to the following four conclusions:(1)the managerial equity incentives can significantly reduce the overall inefficient investment of enterprises.However,it can only reduce enterprise underinvestment significantly,the negative correlation between managerial equity incentives and enterprise overinvestment is not that significant;(2)for enterprises in the growth stage,the managerial equity incentives can effectively reduce the underinvestment,but it has no significant impact on the overinvestment;(3)for enterprises in the maturity stage,the managerial equity incentives can not only effectively reduce the overinvestment,but also effectively reduce the underinvestment;(4)for enterprises in the recession stage,the managerial equity incentives cannot effectively reduce the overinvestment or underinvestment.The innovation of this paper is to divide the life cycle of enterprises and study the dynamic mechanism between managerial equity incentives and enterprise investment efficiency.