Research On The Relationship Between Executives Incentives,Risk-taking And Private Enterprise Performance

In recent years,private enterprises have made great contributions to China’s economic and social development.Report to the 20 th CPC National Congress of the Communist Party of China pointed out that in order to promote the development of private economy,the development environment of private enterprises still needs to be continuously optimized and the legal protection needs to be continuously strengthened.In private enterprises,executives,as the main person in charge of most decisions,have a great influence on the risk and performance level of enterprises,and have an important impact on the long-term and short-term development of enterprises.Secondly,most private enterprises have short capital accumulation time and weak resource capacity foundation,and inevitably face various risks in the process of business development.In addition to obtaining external support,it is more necessary for senior managers to play a role in resolving various risks and improving enterprise performance.It can be seen that it is an important topic and of great significance to study the relationship among "senior management,risk and performance" for how the private economy develops and grows.At present,scholars at home and abroad pay more attention to the single mode and single path between "executive incentive-enterprise performance",and the research on the interaction mechanism between "executive incentive-enterprise performance" and "executive incentive interaction effect" is relatively weak.Therefore,based on related theories and research,this paper discusses "through what mechanism does executive incentive affect enterprise performance" and "interaction effect of executive incentive".The data source of this paper is CSMAR,and all private enterprises as research samples listed in A-share market from 2013 to 2021 are selected.Based on the principal-agent theory,management incentive theory,the theory of human capital development and corresponding theory,combined with the literature in three fields of executive incentive,risk-taking and enterprise performance,the research hypothesis of this paper is deduced and the research model is constructed through theoretical and logical analysis.Secondly,according to the research model and key variables,this paper uses data analysis software Stata17.0 to test the mediating role of risk-taking between executive incentive and enterprise performance,and further tests the interactive effect of executive incentive and its influence on enterprise performance.Finally,this paper uses substitution variable method to test the robustness of the above research conclusions,and obtains the following research results: first,salary incentive,equity incentive and promotion incentive have significant positive effects on enterprise performance,but on-the-job consumption has no significant effect on enterprise performance;Secondly,salary incentive,equity incentive and promotion incentive have significant negative effects on risk taking respectively;Third,risk-taking has a significant negative impact on enterprise performance;Fourthly,salary incentive,equity incentive and promotion incentive have a significant positive impact on enterprise performance through risk taking;Fifthly,further research shows that there is a complementary effect between equity incentive and promotion incentive,while there is a substitution effect between promotion incentive and on-the-job consumption.Based on the above research results,this paper puts forward the following suggestions from the perspective of enterprises and executives: at the enterprise level,we should attach great importance to the selection and introduction of senior managers,set strict assessment standards,rigorous assessment procedures and comprehensive assessment mechanisms,and improve the entry threshold for executives,in other words,we should attach great importance to tapping the personal human capital of executives;Secondly,it is necessary to strengthen the supervision and guidance of senior executives,and make them clear about their enterprise development goals and personal struggle goals through the explicit incentive model;Third,we should dare to adopt salary incentive and equity incentive mode,and increase incentives,which will help improve the performance level of enterprises;Fourth,appropriately increase the pressure of promotion,and urge senior executives to explore opportunities;Fifth,we should rationally allocate existing resources and not blindly pursue high risk-taking level.At the senior management level,first,we should form a strong sense of self-improvement,enhance personal human capital and increase the "retention value";Second,we should pay more attention to the overall interests of enterprises and strive to improve the consistency between individual interests and the overall interests of enterprises;Third,it is necessary to combine personal reality with enterprise reality,not blindly pursue risky projects,but to weigh in many ways and make reasonable and scientific decisions.