Self-serving Behavior Of Executive And Private Placement

Since the agency relationship separation of ownership and management could easily lead to the formation of a conflict of interest between the managers and owners of the company,and makes agency costs. Thus management is likely to seek their own interests arising from self-interested behavior. Since 2013, China's capital market, emerging phenomenon of the management of listed companies involved in the company's private placement. This behavior can not only make low-cost access to equity company executives to quickly achieve the purpose of equity incentive executives bundle. And compared to the incentive, for executives, having performance limits, low taxes, etc. Therefore, it is suspected as a disguised form of equity incentive by the market and a new way of executive self-interest.Therefore, this research is about the management of listed companies to participate in the private placement of this phenomenon and hidden behind the executives set by such self-serving purposes. Management's self-interested behavior may result in destroy of the corporate governance structure,affect the company's normal operation and losses to the interests of shareholders.So the study motivation of this paper is to confirmed the purpose of management's self-interest behind.Hope to make some inspiration to the market and small investors. In this paper, the research is based on the theory of agency conflict, asymmetric information theory and supervision effect hypothesis. In order to confirm the purpose of self-interested executives, this article will use empirical research methods to study the market responses of such private placement. As a refinancing method in capital markets, the announcement of the plan will certainly cause market reaction. Whether private placement or equity incentive, the announcement effect is positive. In this paper, empirical studies have shown the executives' self-interested behavior. Reveals the executives'selfish purpose behind thier involvement in the Company's private placement. It can be from the perspective of market investors description executives set by the self-serving purpose. Data used in the empirical part of this article comes from WIND and CSMAR. The statistical software used in the empirical part of this article is EXCEL and EVIEWS.This paper is structured as follows:Chapter One:introduction, the introduction includes the research background, the main contents and meaning. And making a brief introduction of research ideas and methods.Chapter Two:review, this part is to review the study issues related to this article, involving private placement and self-serving behaviors of executives.Chapter Three:theoretical basis, this part is to introduce the basic theories including private placement, self-serving behaviors of executives and equity incentive. Then, making in-depth theoretical analysis and releasing three theoretical assumptions of this article.Chapter Four:empirical Analysis, using Event Study and multiple regression analysis to obtain the empirical results.Chapter Five:result, this part is to make results and compared it with the main references. Finally, making further suggestions for improvements of this article.