Research On Executive Incentive,diversification And Corporate Performance In Listed Pharmaceutical Companies Of China

Corporate performance has always been a hot topic for scholars,and also the research results on the influencing factors of company performance are very rich.Nowadays,executive incentive arrangements or diversified strategies are increasingly valued by pharmaceutical listed companies.Under such a realistic background,studying the issue of executive incentives and diversification of companies can provide a theoretical basis for pharmaceutical listed companies to improve internal corporate governance mechanisms and improve corporate strategic decision-making mechanisms.Based on the existing research and characteristics of the pharmaceutical industry,this paper integrates executive incentives,diversification,and corporate performance into the same theoretical framework and attempts to analyze the relationship between executive incentives and company performance,the relationship between diversification and corporate performance,and the role of executive incentives in regulating the relationship between diversification and corporate performance.Based on the theoretical analysis,this paper further uses the empirical data of 131 listed pharmaceutical companies in the A-shares market in Shanghai and Shenzhen during 2010-2016 to conduct empirical research.The empirical results show that:(1)Executive compensation has a significant role in promoting the performance of pharmaceutical listed companies,and there is a significant negative correlation between managerial ownership and the performance of pharmaceutical listed companies.(2)The more major industries involved in the main business,the lower the performance of pharmaceutical listed companies.At the same time,there is a significant negative correlation between diversification and company performance.(3)To a certain extent,the level of executive incentives can play a regulatory role in the relationship between diversification and the performance of pharmaceutical listed companies.More specifically,the level of managerial ownership has a positive adjustment effect,while the executive compensation coefficient is positive,but it is not statistically significant.(4)With the enlargement of the board of directors,the performance of listed pharmaceutical companies has also improved significantly;the degree of ownership concentration will have a significant role in promoting the performance of listed pharmaceutical companies.