Equity Incentives And Corporate Investment Behavior

In the context of modern economics,investment management can be said to be one of the three modules of the company's financial management(funding management,profit distribution management and investment management).Investment management is to use capital operation as a means of increasing profits,so that enterprises can gain momentum,reduce corporate risks,and achieve financial management objectives.Nowadays,China's economy has been transformed from a long-term dependence on investment to an"innovation-driven,service-oriented and consumption-driven"model.Enterprise investment behavior is a major strategic deployment of enterprises,which has a far-reaching impact on enterprises.The active transformation of traditional enterprises focus on innovative investment,the new-type enterprises focus on efficient investment,and enterprise investment has become the key to the"efficiency"and"innovation".Key members of the enterprise,especially business managers,are increasingly considered by theory and practitioners to be equal or even more important resources than financial capital(Zeng Deming,2004).On the one hand,equity incentives can retain key business managers.On the one hand,they can coordinate the interests of business owners and managers to solve the agency costs between business owners and managers.Since December 31,2005,China Securities Regulatory Commission officially promulgated the Measures for the Administration of Equity Incentives for Listed Companies,the implementation of equity incentives for managers has become a common incentive for many companies.This paper finds that equity incentives play a more positive role in corporate investment behavior.The effect of equity incentives on corporate investment behavior is likely to be a combination of risk-taking enhancement and agency cost reduction.The benign role of equity incentives has dropped significantly after the implementation of equity incentive.This paper finds that corporate equity incentives have a significant positive impact on corporate R&D investment,and inefficient investments.Through the paired sample T test and non-parametric test,it is found that the implementation of equity incentive period has the highest level of enterprise R&D investment,the second place before the implementation of equity incentive,and the lowest after the implementation of equity incentive;the non-parametric test finds inefficient investment is the lowest in the implementation of equity incentives,the inefficient investment level of the enterprise before the implementation of equity incentives is second,and the inefficient investment level of the enterprise is the highest after the end of the equity incentive period.Through LGCM modeling,we found the overall development characteristics and individual development characteristics of enterprises before,during and after the implementation of equity incentives,and explored the impact of relevant time variation covariates on corporate R&D investment and inefficient investment.This paper finds that the implementation of equity incentives by listed companies will indeed strengthen the R&D investment level and curb the level of inefficient investment.For enterprise R&D investment,it is necessary to focus on the fall of corporate R&D investment after the end of the effective period of corporate equity incentive implementation.In view of the inefficient investment of enterprises,the focus is on the problem of excessive investment of enterprises in the implementation of equity incentive time and the recovery of inefficient investment after the end of the effective period of corporate equity incentives.At present,the longitudinal research literature that incorporates equity incentives,R&D investment and inefficient investment into the same model framework is still rare.This study can clearly reflect the performance of equity incentives on different periods of corporate investment behavior.There are guiding significances for practice.