Research On The Impact Of Executive Equity Incentives On Corporate Financialization

At present,the phenomenon of financialization in Chinese enterprises has become more and more obvious.As the profits obtained by financial investment are gradually higher than the profits brought by industrial investment,more and more non-financial listed companies have switched from industrial investment to financial asset investment,resulting in the emergence of China's economy This phenomenon not only makes the main business of our enterprises and the future strategy wrong,but also causes long-term damage to our economic structure.It will lead to wrong direction for the main business and future strategy of Chinese enterprises,and will cause long-term damage to the economic structure of our country.In modern enterprises,as the main participants in corporate business decision-making activities,their decision-making behavior has a greater impact on the company's capital flow,and will further affect corporate financialization behavior.It can be seen from the principal-agent theory that when the management rights and ownership of an enterprise are inconsistent,the managers and owners of the enterprise have different goals.The self-interested behavior owned by the executives will cause a large amount of enterprise funds to flow into the financial field with high profit margins.Deviating from the company's main business,which not only increases the company's operational risk,but also damages the company's ability to continue to develop healthily.Looking at it now,certain equity incentives for executives are one of the important measures to mitigate the agency problem of enterprises.The establishment of long-term and reasonable equity incentives for enterprises can keep short-sighted executives consistent with the long-term interests of enterprise owners.So that executives can focus on the development of the company's main business and prevent further deepening of the company's financialization.Based on the above considerations,this paper first summarizes and analyzes the relevant domestic and foreign literature such as executive equity incentive and enterprise financialization,and preliminarily combs the theoretical relationship between them;secondly,it introduces the status of equity incentive and enterprise financialization of listed enterprises in China in detail by using relevant chart data.It adopts the phase of non-financial listed enterprises in Shanghai and Shenzhen stock markets in 2007-2017 Based on the relevant data,this paper constructs a panel data regression model to empirically analyze the impact of executive equity incentive on corporate finance,and uses instrumental variable method and tendency matching method to test the robustness.The results show that there is a significant negative correlation between executive equity incentive and corporate finance,the greater the incentive of executive equity,the lower the level of corporate finance.The regression analysis shows that the inhibition of executive equity incentive on corporate finance is more obvious in state-owned enterprises and enterprises with larger financing constraints,and R&D investment in equity incentive affects enterprises In the process of financialization,it plays an intermediary role,that is,the greater the equity incentive for executives,the greater the incentive for executives to increaseinvestment in innovation and R&D,thereby reducing the short-term arbitrage behavior of executives on financial assets,and inhibiting the financialization of enterprises.Finally,based on the conclusions drawn,this paper puts forward policy recommendations for improving the external environment of executive equity incentives,optimizing the design of executive equity incentive schemes,improving corporate executive equity incentive systems,and reducing the level of corporate financialization,to improve corporate governance for listed companies in China Structure,optimize asset allocation,and prevent over-financialization of enterprises to provide a certain reference significance.