| Equity incentive plan has long been considered as a key solution to the problem of principal-agent in listed companies.This paper investigates equity incentive plan in Chinese quoted companies from the perspective of herding behavior.Using empirical research to examine the equity award condition of senior executives.And then test whether the granting of stock options and restricted stocks can effectively improve the company's performance.This research defines the follow-up trend of introducing equity incentive system in companies as a herd behavior,different from the concept in behavioral finance.This kind of following behavior is measured by the equity incentive intensity,reflecting industry situation and determinants of stock-based compensation.Utilizing an improved method of propensity score matching and difference-in-difference to alleviate sample selection bias and adjust time deviation.We empirically discuss the rationality of equity incentive plans made by A shares listed companies from 2006 to 2016.In addition,our study also tests the impact of the nature of enterprise ownership on equity incentive intensity.The results indicate that the equity granting method of a company in the same industry has a positive correlation with other company.In other words,Chinese quoted companies generally have herd behaviors when making decisions to adopt equity incentive system,among which the public utility industry is the most obvious.The company's characteristic variables such as nature of enterprise ownership,size of company,asset-liability ratio and intangible assets ratio all have significant effects on the intensity of stock compensation.Further research shows that equity incentives do not significantly improve corporate performance,reflecting that stock-based compensation is not a completely rational select for Chinese listed companies.Therefore,strategies of listed companies should integrate their specifics instead of blindly following the trend. |
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