| In the capital markets, equity incentive can help to solve the principal-agent problem between the owners and operators because it ensures the interests of owners (shareholders) and management personnel (executives) consistent to the maximum extent. In addition, with its strong attraction to the talent, equity incentive is universally favored by the listed company, and became one of the most important incentives. Therefore, the issue has become a hot spot in the field of academic around world.Through empirical analysis, the author began with the impacts on the investment behavior of the management from the company’s implementation of equity incentive plan, and tried to explore whether implementing equity incentive plan in the management of small and medium-sized listing corporations could effectively improve the investment. It also wants to find out the effects of the different ways. Results of this study are meaningful for the small and medium-sized listing corporations to develop a reasonable equity incentive system and improve the investment.Firstly, the author reviewed the theories of equity incentive and the empirical researches at home and abroad and then constructed a preliminary hypothesis about the underinvestment of the small and medium-sized listing corporations in the theoretical part. In the empirical part, the paper selected the small and medium-sized listing corporations who implemented equity incentive plan as a sample and observed the level of investment so as to study the relevance between the equity incentive plan and the investment decision by constructing the regression model of the level of the company investment with targeted strength and the way of equity incentives as explanatory variables. Through empirical testing, the paper found out a positive effect of the level of investment on the small and medium-sized listing corporations, the situations of making up the underinvestment and the conclusion that stock options enhance the investment level better. Finally, according to the conclusion, the paper put forward suggestions on the small and medium-sized listing corporations’equity incentives implementing.The last, the author proposed suggestions to improve the design of the small and medium-sized listing corporations equity incentive system and provided them advice about how to make equity incentive system play an active role. |
