A Study On The Relationship Of Management Incentives,Internal And External Balances And Goodwill

With the deepening of the capitalization market process,mergers and acquisitions are becoming more and more frequent,and the goodwill formed in mergers and acquisitions is also showing an explosive growth trend.The large-scale growth of goodwill has attracted extensive attention of scholars both at home and abroad.A lot of research has been done on the definition and essence of goodwill,recognition and measurement of goodwill,and economic consequences of goodwill.However,few articles start from the formation of goodwill,empirically analyze and study the factors affecting the recognition of goodwill,and then explore effective ways to control the quantity of goodwill from the source.Goodwill arises in mergers and acquisitions.As the management is directly involved in the decision-making process of M&A,its behavior will have a significant impact on the determination of merger costs,and then affect merger and acquisition goodwill.Management incentive is an effective mechanism to restrain management behavior.Scholars often combine it with company performance,investment decision-making,M&A premium and so on.However,the research literature on the relationship between management incentive and goodwill is seriously insufficient.Based on this,this paper studies the relationship between management incentives and goodwill on the basis of goodwill formation.Based on the principal-agent theory,the optimal contract theory and the management power theory,this paper combines the research results of domestic and foreign scholars on management incentive and goodwill,and selects the listed companies that produce goodwill in Shanghai and Shenzhen A-share markets from 2012 to 2017 as research samples,and explores the relationship between management incentive and goodwill by empirical research.Firstly,it studies how different incentive modes of management will affect goodwill,and then examines whether the relationship between management incentive and goodwill will be affected by the nature of the enterprise and various internal and external balances.The empirical results show that: firstly,the monetary remuneration of management is negatively correlated with goodwill,that is,the higher the monetary remuneration,the less goodwill formed in mergers and acquisitions,and in non-state-owned enterprises,the more obvious the relationship between monetary remuneration and goodwill is,the more obvious the monetary remuneration plays an incentive role.Secondly,the management shareholding ratio is positively correlated with goodwill,that is,the higher the management shareholding ratio,the more goodwill formed.In state-owned enterprises,the relationship between managerial ownership and goodwill is more obvious,and the management shareholding ratio has obvious welfare effect.Thirdly,among the internal balances,the concentration of equity significantly weakens the relationship between management incentives and goodwill,and the separation of the chairman and the general manager has no significant impact on the relationship between management incentives and goodwill.Fourthly,among external balances,the attention of the research report significantly weakens the impact of management shareholdings ratio on goodwill,while audit quality has no significant impact on the relationship between management incentives and goodwill.This research has certain significance both in theory and in practice.It not only enriches the research in the field of management incentives,but also has certain guiding significance for the listed companies to improve the incentive mechanism of management and effectively suppress the emergence of large goodwill.It provides a new perspective for the research in the field of goodwill,and also provides a theoretical basis for the relevant policy formulation.