Research On The Influence Of Managerial Equity Incentive On Dynamic Capital Structure Adjustment

Studies have shown that due to the adjustment costs,the actual capital structure of the company and the target capital structure often have certain deviations.The marginal revenue and marginal cost will be generated during the process of dynamic adjustment of the trend toward the target capital structure.The balance between the two determines the speed of the company’s adjustment.In reality,executives are the direct makers of corporate financial decisions.However,due to agency issues between the company’s executives and shareholders,management often does not aim at maximizing the value of the company.There may be acts that seek personal gain and damage the company’s value.Therefore,easing the agency problem has an important impact on the dynamic adjustment of corporate capital structure.This article is based on the theoretical foundation of senior management holding stocks to help alleviate agency problems and promote capital structure adjustment.It empirically examines the impact of senior management holdings on the speed of corporate capital structure adjustment and further examines this promotion role in different adjustments.Directions and differences in the nature of different property rights.This article mainly achieved the following conclusions:First,executive ownership of stocks has a catalytic effect on the speed of capital structure adjustment,that is,the higher the proportion of senior management holdings,the faster the company’s adjustment to the target capital structure;second,this article Inspected the promotion effect of executive holdings on the dynamic adjustment of capital structure in different adjustment directions and found that compared with the upward adjustment of capital structure,when the capital structure is adjusted downwards,the promotion effect of senior management holdings on the speed of capital structure adjustment will be even greater.Third,this article also examines the promotion of dynamic adjustment of capital structure by senior management holdings under different property rights.Compared with the management of state-owned enterprises,the proportion of senior management holdings of non-state-owned enterprises promotes the speed of capital structure adjustment.More effective.In addition,in the process of regression of the constructed local adjustment model,the validity of different regression methods was first tested.Based on Monte Carlo simulation technology,we generate simulation samples of listed companies in China,and based on this we get the adjustment rate obtained by different methods.By comparing the difference between the preset speed and the estimated speed,we find that the OLS method is most suitable for the dynamic adjustment model of the capital structure of listed companies in China.For our country,the behavior of the enterprise to adjust to the target capital structure is affected by the will and motivation of the executives.In order to maximize the value of the company,the company should work hard to synergize the interests of senior executives and shareholders and give the executives reasonable and scientific equity incentives and compensation.Incentives,which help senior executives better perform their duties of capital structure adjustment.In addition,companies should continue to improve internal corporate governance,give full play to the supervisory functions of the board of directors and the board of supervisors,and ease agency problems between top management and shareholders.