Research On Accounting Conservatism,executive Compensation Incentive, And Investment Efficiency

In the process of business operation and development,the efficiency and effectiveness of investment is the key to measuring the success of an investment activity.Therefore,investment efficiency and effectiveness are the key concerns of enterprises and investors in decision-making.Effective investment activities can increase shareholder value and improve development capabilities.However,due to the irrational behavior of management,inefficient investment will not be conducive to the appreciation of investors’ assets and enhance corporate value.As a kind of incentive and supervision means in the operation process of the enterprise,executive compensation affects the relationship between accounting conservatism and investment efficiency to some extent.In the process of creation,this paper first explains the background of the research,and summarizes the research significance of this paper from the theoretical level and the practical level.This paper summarizes the research status of accounting conservatism,executive compensation incentive and investment efficiency.On this basis,it expounds the theoretical connection and literature review among the three.And the research framework,research methods and possible innovations of this paper are extracted.After defining the relevant concepts and related theoretical foundations,the research hypothesis of this paper is put forward and an empirical analysis is carried out.In the empirical test,this paper selects the relevant indicators of China’s A-share listed companies in 2013-2017 from the CSMAR database as the data sample,takes investment expenditure as the dependent variable,takes accounting conservatism,executive compensation incentive and investment efficiency as the explanatory variables,and selects the equity multiplier,enterprise size and equity concentration as the control variables,and studies the relationship between accounting conservatism,executive compensation incentive and investment efficiency.The results show that:(1)Accounting conservatism will curbs over-investment andwill alleviates under-investment,executive compensation incentive will curbs over-investment but will increases under-investment;(2)Executive compensation incentive strengthens inhibition effect of accounting conservatism on over-investment,both show consistency;(3)Executive compensation incentive strengthens the mitigation effect of accounting conservatism on under-investment,and accounting conservatism has a governance effect.Finally,according to the research results of this paper,the paper puts forward some suggestions on the proper use of accounting conservatism and perfecting the executive compensation incentive mechanism,which encourages enterprises to rationally use accounting conservatism and executive compensation incentive to improve investment efficiency.