Research On The Impact Of Executives' Shareholdings On Financial Assets Allocation Of Listed Companies

Since the 1980 s,with the rapid development of economic marketization and globalization,economic financialization has gradually become the world trend.Economic financialization has both advantages and disadvantages.On the one hand,free funds from the financial industry can promote the development of industrial economy,and also provide funds for the expansion of reproduction of non-financial enterprises.On the other hand,the high returns of the financial industry also make many non-financial enterprises invest a lot of free funds to buy stocks,bonds and other financial products.In recent years,China's economy has been slowing down rapidly.Influenced by the decline of real economic returns and the high returns of financial industry,many non-financial enterprises have invested in financial assets in large quantities,and the flow of funds from operation to finance has shown the trend of asset financialization,which is becoming more and more intense.A large amount of investment in financial assets will squeeze out enterprises' investment in R&D and innovation activities,which is not conducive to the long-term development of enterprises.As the agent of enterprise owner,senior managers play an important role in enterprise investment decision-making.The implementation of stock ownership incentives for senior managers can effectively solve agency problems,alleviate conflicts of interest between senior managers and shareholders,reduce short-sighted behavior of senior managers,and focus on long-term value creation of enterprises.Therefore,based on the phenomenon of financialization of non-financial enterprises,this paper studies the relationship between executive stock ownership and financial asset allocation from the perspective of executive stock incentives,taking non-financial listed companies in Shanghai and Shenzhen A-shares in 2007-2017 as the object.Firstly,starting with theoretical analysis,this paper combs the relevant literature on financial asset allocation,executive stock ownership and financial asset allocation of non-financial enterprises,and makes theoretical preparations for the follow-up empirical research.Secondly,it selects indicators to measure financial asset allocation and executive stock ownership,and selects relevant variables affecting the financial asset allocation of enterprises,and carries out empirical analysis on the data.Empirical research finds that:(1)the proportion of executive shareholding is negatively correlated with the allocation of financial assets.With the increase of managerial ownership,the financial investment of non-financial listed companies will decrease.It shows that as a long-term incentive mode,executive stock ownership incentive can effectively solve management's short-sighted investment behavior and has governance effect.(2)Considering the heterogeneity of financial asset allocation,financial assets with different maturities are classified according to the liquidity level of assets in the balance sheet.It is found that the proportion of executives' shares is positively correlated with short-term financial assets and negatively correlated with long-term financial assets.Enterprises' investment in short-term financial assets may be more due to higher investment income,and short-term financial assets have strong liquidity and short maturity,which can be used as a substitute for cash assets to provide funds for enterprises;and long-term financial assets are configured.The “squeezing effect” on industrial investment is not conducive to the long-term value creation of enterprises,and the multiple motives of enterprises' allocation of financial assets are analyzed from the micro level.(3)From the perspective of financing constraints and investment efficiency,it is tested whether the impact of the shareholding ratio of executives on short-term financial assets is different between the level of financing constraints and the sample group of inefficient investment.It is found that in the sample group with high financing constraints and insufficient investment,the shareholding ratio of executives has a significant positive correlation with short-term financial assets,while in the sample group with low financing constraints and excessive investment,the positive relationship between the two is Not obvious.