A Study On The Relationship Between Executive Stock Ownership And Stock Market Returns

In recent years,more and more listed companies have implemented equity incentives for managers in order to encourage executives to work harder for enterprises,reduce agency costs,improve operational efficiency and increase enterprise value.At the same time,the promulgation of relevant laws and regulations,such as Securities Law,Company Law and Management Measures for Equity Incentive of Listed Companies,not only solves the related institutional drawbacks of the equity of listed companies,improves the efficiency of the securities market,but also breaks a series of laws on the source,flow and transfer of the important enterprise incentive system of executive stock ownership to a certain extent.Obstacles.However,in the practice of enterprises,the implementation of executive stock ownership and full-time stock ownership plan has motivated enterprises to manipulate the stock prices of listed companies,which has an impact on the stock market returns.In addition,the phenomenon that many executives voluntarily hold a higher proportion of the company's stock is becoming more and more obvious,which is an irrational behavior that clearly violates the principle of risk diversification.In view of this,it is of great theoretical and practical significance to explore the issues related to executive stock ownership and stock market returns.Therefore,by discussing the relationship between the proportion of executive stock ownership and stock market returns,this paper further understands the specific governance effect of executive stock ownership as a corporate governance measure and its impact,with a view to giving effective suggestions for listed companies to adjust and improve their governance structure,improve corporate performance and competitiveness,and give full play to the effectiveness of equity incentives,and to provide investors with The optimal investment decision-making scheme for reference is provided.After reviewing the relevant theories of executive stock ownership and stock market returns,this paper studies from the following aspects: first,the impact of executive stock ownership on stock market returns;second,whether the degree of asymmetry of internal and external information will be moderated high.The effect of managerial stock ownership on stock market returns;third,whether managerial autonomy will play a moderating role in the process of the impact of executive stock ownership on stock market returns;Fourth,whether the effect of executive stock ownership on stock market returns is different between state-owned enterprises and non-state-owned enterprises;Fifth,whether the empirical results of the impact of executive stock ownership on stock market returns can pass the endogenous test;Sixth,the empirical results of the impact of executive stock ownership on stock market returns.Whether the results can pass the robustness test.In order to solve the above problems,this paper takes Chinese A-share listed companies from 2003 to 2017 as the research object,and assumes managerial rationality and investor irrationality as the premise.Fama-French three-factor model is used to construct the index of return on buying and holding stocks.Lilienfeld-Toal and Ruenzi(2014)are used to measure managerial autonomy and information asymmetry.Then,statistical analysis is carried out by Fama-MacBeth regression.The following conclusions are drawn:(1)There is a significant positive correlation between executive ownership and stock market returns,and the size of listed companies.This positive correlation will not have a significant impact,and the higher stock market returns do not come from the compensation for beta-related systemic risk.(2)The degree of information asymmetry plays a negative regulatory role in the process of the positive impact of executive stock ownership on stock market returns.That is to say,compared with companies with low degree of information asymmetry between insiders and outsiders,in companies with high degree of information asymmetry,executive stock ownership has a greater positive impact on stock market returns.(3)Managerial autonomy plays a negative regulatory role in the positive impact of executive ownership on stock market returns.Compared with companies with higher executive autonomy,the positive impact of executive ownership on stock market returns is more obvious in companies with lower executive autonomy.(4)The nature of property rights affects the effect of executive stock ownership on stock market returns.That is to say,compared with state-owned enterprises,executive stock ownership of Listed Companies in non-state-owned enterprises has a stronger positive impact on stock market returns.