The Influence Of Executive Incentive Contract On The Inefficient Investment Behavior Of Listed Companies

How to reduce the non-efficiency investment of enterprises and improve the investment efficiency of enterprises has always been a hot topic in academic circles.However,the existing researches mostly focus on the study of the role of single executive incentive contracts in different situations on the efficiency of enterprise investment,ignoring as a valid executive incentive contract and the path mechanism between executive incentives and corporate investment efficiency,executive reputation has not yet made some research on its "black box".Based on the 2012-2017 China listed company balance panel data,this paper empirically examines the impact and path of executive explicit and implicit incentive contracts on corporate investment efficiency.According to the effective contract hypothesis in the agency theory,this paper believes that the executive incentive contract can have a certain inhibitory effect on the agency cost of the enterprise.As an effective implicit incentive contract,executive reputation can effectively supplement the agency problems brought by management power and improve the investment efficiency of enterprises.The research results show that as the main way of explicit incentive contract,executive compensation has a certain inhibitory effect on the agency cost of the enterprise;the agency cost between the shareholder and the management layer has a mediating effect between the executive compensation and the enterprise investment efficiency.The incentives and constraints of senior executives in high-tech listed companies are more significant.The increase in executive compensation has weakened the agency problem,which will promote the investment efficiency of enterprises.As a typical implicit incentive contract,the reputation of executives consists of three dimensions:reward reputation,industry reputation and political reputation.The reputation of executives will have a positive impact on the efficiency of investment,and the incentive efficiency of executive incentive contracts for enterprises.There is a certain inhibition.According to the research content,this paper puts forward the following suggestions for optimizing the governance mechanism design of listed companies:Firstly,constructing a good reputation evaluation and cultivation mechanism,improving the reputation level of existing executives,and giving full play to the role of implicit incentive contracts,can effectively enhance enterprises Investment ef-ficiency.Secondly,make rational use of CEO's explicit incentive contract,give full play to its incentives and constraints on corporate executives,and improve the effectiveness of corporate governance.Thirdly,improve the investor protection system.In response to the agency problems brought about by management power,the company should further improve the high-control mechanism of the company,such as strengthening the company's internal control,strengthening the company's information disclosure and the governance of the board of supervisors.