Equity Incentive And Risk-taking

Equity incentive is an important means for modern companies to improve their governance capabilities and corporate performance.Therefore,it has always been a research object that academics pay close attention to.The existence of equity incentives may alleviate corporate agency conflicts and exacerbate corporate agency problems.Unlike the European and American capital markets,China 's equity incentive system started late,and due to factors such as China 's relatively high concentration of equity and the financing difficulties of private enterprises,the economic consequences of equity incentives in Chinese companies may differ from foreign countries.Based on the perspective of financing constraints,this paper studies how listed companies with different financing capabilities will have an effect on one of the typical agency problems of an enterprise,namely the risk of the enterprise.The innovations of this paper are:(1)Introduce corporate financing constraints as moderators and explore the impact of equity incentives on corporate risk-taking.(2)Examine the impact of the two main equity incentive targets of stock options and restricted stocks on corporate risk separately.This article selects A-share listed companies on the main board of Shanghai and Shenzhen stock exchanges from 2010 to 2018 as the research sample.Based on the analysis of principal-agent theory,information asymmetry theory and prospect theory,and the derivation of the mechanism of listed companies' equity incentives acting on corporate risk bearing The empirical study of the impact of equity incentives on the risk exposure of listed companies,and proved the moderating role of financing constraints.At the same time,based on the characteristics of the two main targets of equity incentives,this article further explores their role in corporate risk exposure,and recommends that companies choose appropriate equity incentive targets to achieve incentives or benefits based on their own development goals and financing capabilities.purpose.The conclusions of this article are as follows:(1)Equity incentives are negatively related to corporate risk commitment.The implementation of equity incentives by listed companies can reduce the risk level of the enterprise and enable it to develop steadily;(2)Restricted stocks and corporate risk commitment are negative For related relationships,the use of restricted stocks as incentive targets by listed companies can guide management to operate cautiously;stock options have a positive correlation with corporate risk-taking,and the use of stock options as incentive targets by listed companies can enhance the enthusiasm of executives to face risks;3)In the group with large financing constraints,equity incentives and restricted stocks have a greater inhibitory effect on corporate risk bearing;in the group with small financing constraints,stock options can significantly enhance the risk tolerance of the company,but the above The effect is not significant in the group with large financing constraints.This shows that the degree of corporate financing constraints can regulate the effect of equity incentives and their methods on corporate risk.