Research On The Influence Of Executive Incentive On Enterprise Capital Structure

According to the principal-agent theory,the interests of shareholders and managers are not always consistent due to the pursuit of the dispute,which will have a principal-agent problem,and one of the important ways to solve this problem is to implement executive incentives.By giving managers a certain degree of incentives,can effectively alleviate the contradiction between shareholders and managers and reduce the negative impact to company.In the process of corporate governance,management incentives and the company's capital structure has some contact.Shareholders through incentives to managers,so that managers can be more actively engaged in the management of the company,and executives as the company's financial decision-makers and implementers,implementing incentives will have an important impact om the company's financial decision-making behavior,so as to affect the company's capital structure.On the one hand,managers in order to enhance the value of the company in order to obtain a good return,will actively carry out investment and financing decisions,so as to promote the company's actual capital structure of the continuous adjustment and optimization;the other hand,according to dynamic trade-off theory,the company's actual capital structure Constantly changing,and often deviated from the optimal capital structure,and the implementation of incentive executives have motivated intervention in the adjustment of capital structure,making the company's actual capital structure to the optimal capital structure gradually closer.Based on the theoretical research on managerial incentive and capital structure,this paper chooses listed companies in China as the research object,and through the use of empirical method to analyze the effect of managerial incentive on the actual capital structure of the company,Revelation of related conclusions.This paper first reviews the research literature of manager incentive and corporate capital structure,and makes a systematic and concise combing of the theoretical development of the two.Secondly,it analyzes the present situation and the characteristics of executive incentive of manufacturing industry in China This paper uses the first-order difference generalized matrix method(GMM)to analyze the dynamic panel data,and then uses the first-order difference generalized matrix method(GMM)to analyze the dynamic panel data.In this paper,(Pooled-OLS)and fixed-effect regression(FE)were used to test the effect of executive compensation incentive and equity incentive on the rate of capital structure adjustment and the deviation of optimal capital structure.Through the analysis,it is found that the managers of listed companies in China,both the implementation of salary incentive and equity incentive,can make the capital structure adjustment speed significantly accelerated;and in reducing the degree of deviation of capital structure,salary incentive and equity incentive are significant Influence,in addition,the company size,profitability,mortgage capacity,non-debt tax shield and other factors can also be on the capital structure of the adjustment process have a certain impact.Finally,based on the conclusion of the research,this paper gives the research inspiration,and analyzes the limitations of this study.