Equity Incentive,Ownership Structure And Inefficient Investment

At present,China's economy is in a period of transition from high-speed development to high-quality development.As an important part of stimulating economic growth,the effectiveness of investment decisions is often widely concerned by enterprises.The effectiveness of investment behavior can directly affect the business profit level of the enterprise and the objective evaluation of the external capital market on the company's performance,which is related to whether the enterprise can achieve the goal of maximizing value.However,due to the problem of principal-agent relationship between managers and shareholders in the daily operation of enterprises,it is often because of the influence of various realistic factors,making decisions that deviate from the optimal investment scale of the enterprise,that is,non-efficiency investment behavior.Domestic and foreign scholars have found that the implementation of equity incentives can effectively alleviate the problem of principal-agent and reduce the conflict of interest between shareholders and management.Therefore,it is also considered as an effective way to restrain the inefficient investment behavior of enterprises.However,with the deepening of research,scholars have found that in the listed companies with different ownership structures,there will be some differences in the impact of equity incentives on non-efficiency investment behaviors,and there may be a promotion or non-linear correlation.At present,domestic and foreign scholars usually use the equity concentration degree,equity balance degree and property rights as explanatory variables to explore the impact of ownership structure on management investment behavior.With the success of the listing of dual-class structure companies such as Baidu,JD,and Alibaba in the US,many scholars have paid attention to this special form of ownership structure.The management of the dual-class structure is composed of the founders of the enterprise.It belongs to the typical insider control.There are both ripple effects and interest convergence effects in the principal theory.In the listed companies using the dual-class structure,will the inhibition of non-efficiency investment behavior be affected by equity incentives? This paper proposes the following three questions: Can the equity incentives suppress non-efficiency investment behavior in the listed companies? whether there is a difference in the non-efficiency investment behavior of different equity structures;whether the equity structure has regulatory effect on the relationship between equity incentives and non-efficiency investments.This paper takes the data of 2008-2017 listed in the US as a sample to explore the impact of equity incentives on non-efficiency investment behaviors,and analyze the differences between non-efficiency investment behaviors of listed companies that use dual-class structure or single equity structure.And further study the impact of the dual-class structure on the relationship between equity incentives and non-efficiency investment.The results show that the implementation of equity incentives to the management can significantly inhibit the inefficient investment behavior of the company,and the equity incentives have more significant inhibition on the excessive investment behavior of listed companies;Compared with the single equity structure enterprise,the dual-class structure enterprise is more prone to inefficient investment behavior,and mainly manifests as over-investment;The equity structure has a certain adjustment effect on the relationship between equity incentive and non-efficiency investment.Compared with the single equity structure,the incentive effect of equity incentives on over-investment behavior is relatively weak in the enterprises with dual-class structure.That is,the implementation of dual-class structure weakens the inhibition effect of equity incentives on excessive investment behavior.This paper grasps the opportunity of the Hong Kong Stock Exchange to allow dual-class structure companies to list,which enrich the research of dual-class structure and equity incentive system,and provide reference for the listing of dual-class structure enterprises in the mainland securities market.Strengthen the internal control and supervision by optimizing the dual-class structure,and establish a scientific and rational investment management system to improve the resource allocation efficiency of the listed companies with dual-class structure.This will protect the founder team's reasonable control of rights and benefits,and also promote management to pay attention to the long-term development goals of the company.