The Impact Of Management Equity Incentives On Financialization

In recent years,with the deepening reform of the national financial system,it is undoubtedly an important task to enhance the basic purpose of the financial industry to serve the real economy.In terms of monetary policies,financial supervision and macro-prudential policies,the Party,the state and various ministries and commissions have taken serving the real economy as the fundamental goal.However,as the core of the market subject,the state of the enterprise is that the degree of financialization will continue to improve.Theoretically,due to the principal-agent problem,the interests of shareholders and management are not consistent,which tends to lead to the management’s pursuit of short-term investment returns and increase financial investment,exacerbating the risk of enterprise financialization.The implementation of equity incentive to the management is likely to promote the management to pay attention to the long-term development of the enterprise,so as to reduce the financial degree of the enterprise.In order to verify this point of view,this paper conducts an empirical analysis based on the data of non-financial and non-real estate industries in China from 2010 to 2020 to empirically study the effect of managerial equity incentive on the financialization of enterprises,and conducts heterogeneity analysis by distinguishing the industrial nature and equity incentive mode of enterprises.The research conclusions of this paper show that:(1)the implementation of management equity incentive can significantly reduce the degree of financialization of enterprises,that is,the higher the proportion of management ownership,the lower the proportion of financial asset allocation of enterprises,and the conclusion is still valid after a variety of robustness tests;(2)The heterogeneity analysis of property rights shows that equity incentive for management can effectively restrain the financial degree of enterprises in both state-owned enterprises and non-state-owned enterprises,and the inhibition effect is greater in state-owned enterprises;(3)The heterogeneity analysis based on the management equity incentive mode shows that the non-restricted equity incentive mode can reduce the financial level of enterprises more than the restricted equity incentive mode.Needless to say,this article has certain marginal contribution to the research,the empirical research conclusion not only reveals the implementation of the management equity incentive to curb the important role of enterprise financialization degree,also shows that the different nature of property rights of enterprises can adopt the way of the management equity incentive,virtual to real,and can be unrestricted decrease enterprise financialization level in the form of equity incentive.