Research On The Impact Of Equity Incentives And Earnings Management On Investment Efficiency

Investment efficiency is critical for listed companies.As we all know,the company's three major financial decisions are investment,financing and profit distribution.The correctness of investment decisions directly affects the growth of the company and has a profound impact on the growth of the company.In order to ensure the long-term development of the company,it is necessary to pay attention to the factors that have an impact on investment efficiency and maximize the investment efficiency of the company.The quality of accounting information is an important factor that affects investment efficiency.However,with the separation of ownership and management rights,the problem of principal-agent is generated.Management manages accounting information by conducting earnings management,which reduces the quality of accounting information.Due to the asymmetry of management and shareholder information,it will have an impact on the company's investment efficiency.Equity incentives are policies designed to solve the problem of principal-agent problems and information asymmetry.It is of great significance to study the feasibility of equity incentive policies in China.This paper studies both theoretical and empirical aspects.Firstly,the relevant literatures are sorted out,and then through the analysis of principal-agent theory,information asymmetry theory and incentive theory,the theoretical analysis framework of the relationship between equity incentives,earnings management and investment efficiency is constructed,and research hypotheses are proposed.Secondly,the financial data of listed companies in Shanghai and Shenzhen stock exchanges for 2012-2016 are selected as samples,and the model is constructed to study the impact of earnings management on investment efficiency,and to study the adjustment effect of equity incentives on the impact of earnings management on investment efficiency.The data was processed by STATA13 for descriptive statistics,correlation analysis,multiple regression analysis and robustness test.Finally,through the analysis of the empirical results,the research conclusions,policy recommendations and the limitations of this paper are presented.Empirical studies have found that the higher the company's earnings management,the lower the investment efficiency.In the analysis of the adjustment effect of equity incentives on the impact of earnings management on investment efficiency,it is found that equity incentives play a regulatory role in the impact of earnings management on investment efficiency.Equity incentives can reduce the adverse impact of earnings management on investment efficiency.As a moderator of measuring the degree of equity incentives,the proportion of shares is higher,which will reduce the adverse impact of earnings management on investment efficiency.The innovation and contribution of this paper are mainly as follows:In the study of the relationship between earnings management and investment efficiency,this paper creatively adds equity incentives as adjustment variables,analyzes the impact of equity incentives on the relationship between earnings management and investment efficiency,and uses Chinese data.Empirical research can be used to determine the adjustment effect of equity incentives on earnings management and investment efficiency,which not only enriches the literature on earnings management and investment efficiency,but also enriches the literature on equity incentives.