A Study On Executive Incentive,Earnings Management And Overinvestment Behavior

Investment as one of the three carriages that drive economic growth,the level of investment has seriously affected the future development of the whole country.Therefore,investment efficiency has always been one of the hot issues in practical and academic research.At present,the inefficient investment problem of listed companies in China still exists,and the phenomenon of insufficient investment and over-investment is common.It is because of the over-investment in China’s listed companies in the prevalence of listed companies operating,financing and other aspects have a greater impact on the company in the business development has caused a serious impact.Therefore,it is of great practical and theoretical significance to analyze the factors that cause excessive investment behavior and put forward the corresponding measures in time.An important reason for the over-investment behavior is that there are earnings management behaviors in many listed companies.At the same time,in the absence of other factors under the premise of the effective management of the executive incentive system for excessive investment and earnings management behavior has a certain role in governance.However,if you consider the existence of earnings management behavior in the company under the factors,executive compensation incentive system on the over-investment is still according to the role of governance? Therefore,this article from the executive compensation incentive system,through the specific analysis of executive compensation incentive system,earnings management behavior,excessive investment behavior between the three in order to curb excessive investment behavior to make relevant policy recommendations.Based on the analysis of Richardson(2006)and Jiang Fuxiu and Jones models,this paper measures the over-investment and earnings management indicators respectively.Based on this,we construct the relevant regression.Model,and gradually analyze the relationship between executive compensation incentive and over-investment,the relationship between earnings management and over-investment,and the relationship between executive compensation incentive,earnings management and its pay and over investment.The results show that there are over-investment behaviors in China’s ShenZhen HongKong A-share listed companies.In the executive compensation incentive,monetary compensation incentive can significantly inhibit the occurrence of over-investment behavior.The incentive of the senior management unit leads to the occurrence of over-investment behavior.There is a significant positive impact on the level of over-investment;whether it is executive monetary compensation incentives or executive holding incentives have exacerbated the positive impact of earnings management on over-investment.Finally,on the basis of the research results,the author puts forward some relevant policy suggestions on how to establish and improve the executive compensation incentive system,restrain the earnings management behavior and excessive investment behavior,and summarize the shortcomings of this study.The new direction of the future research.