Empirical Study Of The Effect Of Ownership Structure And Executive Incentive On Corporate Performance

After nearly nine years of development, the small and medium-sized enterprises board has become an important part of capital market in China and played an important role in improving the financing ability of small and medium-sized enterprises, promoting their Joint-stock reform, building multi-level capital market system. However, after coming into the market, it remains to be further researched whether can small and medium-sized enterprises improve their corporation performance by improving ownership structure, choosing reasonable governance mechanism, using more efficient executive incentives.On the basis of the relevant theoretical research at home and abroad, this paper has used a variety of research methods. At first, this paper explored the influence of the shareholding proportion of the first-largest shareholder, the ownership centralization, the ownership restriction ratio and the executive incentive on corporation performance. Afterwards, by building positivism model, this paper studied171corporations from the small and medium-sized enterprises board, estimated the parameters of the regression equation and carried on quantitative study of the relationship between the variables. Through above analysis, several questions were looking forward to be solved:whether the shareholding proportion of the first-largest shareholder, the ownership centralization, the ownership restriction ratio and the executive incentive are the material effect factors to the corporation performance? Which one of executive incentives is more effective to the corporation performance? When the shareholding proportion of the first-largest shareholder changes, how does the correlation relationship between executive incentive and corporation performance change?This paper gets the following results through multiple regression analysis to all examples:there is a U shaped relation between the shareholding proportion of the first-largest shareholder and corporation performance; the ownership restriction ratio has positive effect on corporation performance; the ownership centralization has no significant effect on corporation performance; executive compensation incentives has no significant effect on corporation performance; executive equity-based incentive has positive effect on corporation performance; corporation performance is more sensitive to executive equity-based incentive than executive compensation incentive.This paper gets the following results through multiple regression analysis to the examples of sub-category:when the shareholding proportion of the first-largest shareholder increases, corporation performance is more sensitive to executive compensation incentive than before; under the same condition, the correlationship does’t change between corporation performance and executive equity-based incentive.The result of multiple regression analysis indicates that:when the shareholding proportion of the first-largest shareholder reached a certain extent, it would be helpful to improve corporation performance; the ownership restriction ratio is one of the important effect factors to the corporation performance; sensitive executive equity-based incentive is a more effective measure to corporation performance than executive compensation incentive; the increase of the shareholding proportion of the first-largest shareholder can further improve the effect of executive compensation incentive.