| Investment decisions play an important role in corporations’ future development,and have a great effect on the allocation of resources,future profitability and reputation of companies.How to make investment decisions has always been an important issue for enterprises.But because of the agency conflict,the information asymmetry and the lack of capacity of managers,Investment alienation problems which are abnormal inefficient investment behaviors often arise from enterprises.Investment alienation can be classified as over-investment and under-investment.Over-investment refers to an enterprise investing in high-risk and negative NPV investments.Under-investment refers to an enterprise investing in low-risk and positive NPV investments.Investment inefficiency is quite serious in China’s listed companies.Over-investment can result in the waste of resources and increase the risk of bad debts in the future.Under-investment would cause idle resources and the slow growth of corporate value,which would has a nagative impact on the interests of investors.Besides,In our country,the under-investment phenomenon is more common than the over-investment phenomenon.Therefore,find out the reasons for under-investment and put forward corresponding solutions is what we need to do currently.This paper takes the A-share listed companies in China from 2008 to 2016 as the research samples,based on the impact of external earning pressure on the corporations’ under-investment behaviors,discussing the regulating effect of executives’ equity incentives on the impact,and the specific type of equity incentives playing a role in regulating.This study finds:(1)the external earning pressure would result in corporations’under-investment behaviors;(2)executives’equity incentives can alleviate corporations’ under-investment behaviors due to the external earning pressure;(3)compared to restricted stocks and equity incentives of incentive-type,stock options and equity incentives of welfare-type are more likely to mitigate corporations’under-investment behaviors caused by the external earning pressure;(4)compared with state-owned enterprises,for non-state-owned enterprises,external earning pressure is more likely to lead to under-investment behaviors,and the effect of executives’ equity incentives on the under-investment caused by external earning pressure is more effective.This paper has an important guiding meaning for enterprises formulating executives’ equity incentive policies and improving the efficiency of enterprises’investment. |
