Compensation Structure,Media Converge And Underinvestment

Investment decision-making is an important part of enterprise financial management,it directly affects the survival and development of enterprises.In recent years,the inefficient investment of listed companies in China is becoming more and more serious,which not only damages the company's value but also affects the long-term development of enterprises.Because of the asymmetry of information between shareholders and managers,the management in the information superiority side can obtain more investment information than the shareholders,which causes the management to damage the shareholders' interests for its own benefit maximization.Effective executive incentive mechanism can ease the separation of ownership and management rights arising from the agency problem,but also can motivate executives to maximize the value of the enterprise to make efforts.With the development of information technology industry,media development is also more and more rapid,its social and economic life also plays an important role.Media as an important information intermediary,is the mitigation of information asymmetry and corporate governance role.On the one hand,the media can collect the information to pass to the public,thereby reducing the cost of the users.On the other hand,the media play a corporate governance role through law,executive reputation and public image(Dyck and Zingales,2002).There are not many researches on the problem of underinvestment and its influencing factors,so we should pay more attention to it(Zhou Weixian,2010).In this paper,the author analyzes the reasons of the investment shortage in China listed companies.In the case of executive compensation,there has been a significant negative relationship between executive compensation and firm investment(Xin et al.,2007),but little is known about the impact of compensation on salary structure.This paper chooses Chinese A-share listed companies as the research object,andtesting the relationship between compensation structure and the underinvestment.At the same time,this paper adds the variable of media reports to further test the impact of media reports on the relationship.The main contents of each chapter are as follows:The first chapter is the summary of the paperexpounding the background,the significance of the research,the research content and the research innovation.The second chapter is the literature review.This chapter analyzes the literatures on the factors of underinvestment,influence of executive compensation on investment and analyzes the influence of media on investment efficiency.The third chapter is theoretical analysis and research hypothesis.It elaborates the concepts,the principal-agent theory,and puts forward the hypotheses of this paper.The fourth chapter is research design.This chapter mainly describes the source of the data and the sample selection process,and constructs the model of this paper,meanwhile,it explains the main variables needed by the model.The fifth chapter is empirical test and results.Through the construction of multiple regression models,analyzes the sample data,and the results with the actual situation.The sixth chapter is the conclusion,suggestion and limitation.In this chapter,we summarize theconclusion of the paper,and put forward the corresponding policy suggestion according to the concrete circumstance in the real world,and point out the limitations of this paper.The results of this paper are as follows: Due to the existence of information asymmetry,the problem of inefficient investment is prevalent in listed companies,and the problem of underinvestment is more serious.The proportion of in-service consumption to total remuneration,the alternative of monetary reward to non-pecuniary and the underinvestment were significantly negative correlation and positive correlation.The addition of media coverage variables enhanced the negative effect and weakened the positive effect.At last,the paper puts forward some related policy recommendations from the three perspectives.First,improve the internal corporate governance structure;Second,establish and improve the supervision and management mechanism;Third,attention to media supervision and corporate governance functions.The innovation of this paper is mainly from the following aspects: First of all,the existing literature is more from the whole of non-efficiency investment,so this paper will consider the impact of explanatory variables on the underinvestment.Secondly,the proportion of in-service consumption to total remuneration and the alternative of monetary reward to non-pecuniary are taken as the variable of salary structure to measure its impact on underinvestment.