Equity Incentives,Financing Constraints And Corporate Growth

According to the optimal contract theory,the equity incentive system has obvious advantages in alleviating the agency problem between the owner and the manager.With the promotion and application of equity incentive by more and more enterprises,we have also found that some enterprises which have scientific and reasonable equity incentive systems can gain well development.Corporate growth represents the company's capability of management and potential of development,and it is a concrete manifestation of the company's comprehensive quality.To improve it,companies need to consider its organizational coordination ability,innovation ability,brand influence,production efficiency,investment efficiency and enterprises cultural construction,but improvement in these areas cannot be achieved without sufficient funds for guarantee and support.Although China's current financing environment has been greatly improved,there is still a lot of literature indicating that many small,medium and micro enterprises are still facing difficulties in financing and expensive financing,and financing constraints have become a fetter that seriously affects the growth of many companies.This paper conducts research on this situation,the purpose is to explore whether the implementation of equity incentive plans can effectively promote the growth and development of companies,and whether the "equity incentives ? financing constraints ? corporate growth" transmission mechanism is established,and which equity incentive method is more effective,thereby helping enterprises to deepen their understanding of the role of equity incentives,and providing a reference for companies to choose appropriate equity incentive methods to help companies improve their growth.Based on the data of non-financial and insurance A-share listed companies from 2014 to 2018,12402 samples were selected as observation values.Based on the principal-agent theory,optimal contract theory,profit sharing theory and two-factor theory,this paper studies the relationship between equity incentives,financing constraints and corporate growth,and the intermediary effect of financing constraints on the relationship between equity incentives and corporate growth.Through literature and empirical research,the multiple regression models are constructed,and the statistic test and intermediary effect test are carried out.In addition,this paper also subdivides equity incentives according to their incentive methods,and conducts further research.In terms of research ideas,this paper introduces the intermediary variable of financing constraints,which enriches the research ideas in the field of corporate growth.In terms of indicator measurement,this paper comprehensively evaluate the growth of the company from the four dimensions of profit ability,operating ability,investment income ability,and development ability,and reduce the dimension through the principal component analysis method to avoid the lack of information to some extent caused by a single indicator.The empirical results show that after controlling the relevant variables,equity incentives can effectively improve enterprise growth,and financing constraints play a significant intermediary effect between equity incentives and corporate growth,that is,equity incentives can promote corporate growth by reducing financing constraints.At the same time,the empirical results also show that the incentive method of restricted stocks has the best effect on improving corporate growth.Based on the conclusions,this paper makes some suggestions in the following areas:(1)Establishing a targeted scientific and reasonable equity incentive plan plays an important role in stimulating the creativity of managers and employees and promoting the growth of the company;(2)Establishing a scientific and reasonable performance assessment mechanism and being able to effectively implement is extremely important for the implementation of equity incentive plans;(3)Financial institutions are advised to make discretionary choices and comprehensive analysis when faced with the credit needs of companies.For companies that have not fully met the basic indicators but have good prospects for development,financial institutions should also provide a certain extent credit support according to specific circumstances to help them grow.Finally,this paper summarizes the limitations in the research and puts forward the outlook.