Research On Managerial Background Characteristics,Promotion Incentive And Inefficient Investment

Under the condition of separation between enterprise ownership and control, the impact of management agency problem on enterprise financial decision has been a subject of modern financial theory. On the investment decision of the enterprises, the management agency problem can lead to overinvestment, and will also lead to underinvestment. These two kinds of investment behavior are invalid, both of which will cause losses to the enterprise value and shareholder wealth. For these two invalid investment behavior, many research has been carried out from different aspects of governance mechanisms. Among them, one important aspect of which is the manager incentive mechanism. But in the current principal agent theory, on one hand, the research on incentive mechanism affecting the investment behavior both in the aspect of incentive or in terms of investment seems the managers as homogeneous. This is not only inconsistent with reality, but also not reveal fundamentally the reasons that different managers hold different views or sensitivity on incentive, and different effects on investment behavior; On the other hand, the research on incentive mechanism mainly focuses on compensation incentive and equity incentive, but study on promotion incentive is insufficient. Therefore, starting from the perspective of managerial background characteristics, bringing heterogeneity of managers into the analytical framework of the principal-agent theory, to study on the effects of different background characteristics of managers on the sensitivity of promotion incentive and the impact on investment behavior own important theoretical and practical significance.Based on the review of domestic and foreign related research achievement, using the principal-agent theory, the upper echelons theory, and psychological contract theory, adopting the research methods combination of qualitative analysis and quantitative analysis, normative analysis and empirical analysis, considering the institutional background of our country, this thesis theoretically analyzes and empirically examines the relation among managerial background characteristics, promotion incentive and inefficiency investment research. First, this thesis examines the relation between promotion incentive and inefficiency investment in order to judge whether the promotion incentive can play incentive effect; Second, this thesis examines the relation between promotion incentives and managerial background characteristics in order to judge whether there is difference that different background characteristics of the management team holds different promotion incentive view or sensitivity; Third, this thesis examines the relation among managerial background characteristics, promotion incentive and inefficiency investment in order to examines whether there are differences in manager’s inefficiency investment behavior under promotion incentives.The innovation in this thesis mainly manifests as follows. Firstly, this thesis brings managerial background characteristics into the analysis frame of principal-agent theory, and establishes the management incentive contract based on heterogeneity, thus builds up a new theoretical framework of promotion incentives that can affect investment behavior. It will help to improve the principal-agent theory, enrich the study of upper echelon theory, provide a new perspective and approach for the further study of enterprise efficiency of investment motivation, behavior and governance issues. Secondly, this thesis focuses on the promotion incentive effects on inefficiency investment from the view of managerial background characteristics. The research about incentive mechanism mainly focuses on compensation incentive and equity incentive, but study on promotion incentive is insufficient. Despite many research found that managers have a strong desire for promotion, especially in domestic economic transition period, there is little research on how managers realize the desire for promotion through the investment behavior. Based on the psychological contract theory, this thesis theoretically analyzes and empirically examines the relationship between the promotion incentive and inefficiency investment, and the relation between promotion incentives and managerial background characteristics from the point of view of the background characteristics of managers, in order to reveal the mechanism and achieve approach of promotion incentives affect on different background characteristics management. This will contribute to the research of incentive mechanism and investment behavior, research content of principal-agent theory and psychological contract theory. Thirdly, this thesis comprehensively and systematically examines effect of promotion incentive on different manager and effect of promotion incentive on inefficiency investment from average, heterogeneity and vertical dyad linkage characteristics of management team. It will enhance the comprehensive and systematic of the research on management team background characteristics, and deepen the understanding of the management behavior characteristics.