Management Incentive And Capital Structure Dynamic Adjustment

For a long time,the capital structure decision is the most important financial decision.In order to maximize the value of the company,managers have an incentive to adjust capital structure to its target capital structure,but the dynamic adjustment of capital structure is affected by many internal and external factors.First of all,the "two rights separation" causes principal-agent problems,so even when the adjustment income is high or the adjustment cost is low,management may also be not willing to make any capital structure adjustment.In recent years,many study has proved that the management incentive mechanism is one of the effective ways to relieve the agency problem between the owner and the management.It can greatly improve the enthusiasm of management to maximize the value of the company.In addition,because of the characteristic of the Confucian culture in our country,customer concentration(business network)is particularly important.It has become a kind of external governance mechanism,or a "key resources".The customer as the main stakeholders has a significant impact on enterprise's production and operation.This impact is mainly applied to management motivation and behavioral intention,which is may be either positive or negative.Therefore,this paper tries to research the enterprise dynamic adjustment of capital structure is affected by the management incentive or not and study the regulation effect of customer concentration.Based on combing the related literature and theory,we choose all the Shanghai and Shenzhen A-share listed companies between 2010 and 2016 as the initial sample,respectively inspection executive compensation incentive and the management equity incentive effect on dynamic adjustment of capital structure.We also consider the regulating effect of customer concentration the influence of the property rights factor.Finally,we came to the conclusion and put forward policy Suggestions.The following conclusions are drawn from this paper: first,the management incentive will promote the active adjustment of the capital structure of the company,but the impact is not significant in the state-owned enterprises;Second,when the capital structure of the company is higher than the target capital structure,and the capital structure needs to be adjusted downward,the positive incentive of the management incentive to the dynamic adjustment of the capital structure is greater;Third,in the whole sample analysis,customer concentration will weaken the effect of management incentive on dynamic adjustment of capital structure.But the regulation of customer concentration effect in state-owned enterprises is not significant.At last,the paper puts forward relevant measures and suggestions from the company level and policy system.