Management Ownership And Labor Investment Efficiency

According to agency theory,the pursuit of different benefit of leads to the conflict between principal and agent.The agent may take advantage of information asymmetry,while causing the losses in shareholder value.The existing research measure such losses by company performance or capital investment efficiency,and make proposals on how to alleviate the conflict.The importance of labor investment has been underestimated in China,both in practice and research.Labor investment helps companies to restore effective human capital,which provide companies with long-lasting vitality and innovation capacity.Learning what influences labor investment efficiency helps companies with their future investment decisions.The ownership incentive is a method that bonds principal and agent closely.However,there has not been much consensus on the application of ownership incentive in China.This article presents a new direction,which connects ownership incentive with labor investment,intending to find out what managerial ownership may do to companies' day-to-day running and how it affects labor investment efficiency.This article uses data from China;s A-share market,in order to explore the connection between managerial ownership and labor investment efficiency,which is proved positively correlated.Furthermore,this article examines the role of ownership structure,financial restraint and growth potentials.This article digs into the factors affecting investment efficiency reveals that different investment decisions are affected by the different factors.Besides,managerial ownership plays a different role in different decisions,so companies should choose to undertake ownership incentive mechanism based on their actual need instead of blindly following.