Research On The Impact Of The Opening Of High-Speed Railway On Executive Compensation Incentive

Under the background of the separation of the two powers in modern enterprise system,information asymmetry and conflict of interest between executives and shareholders make agency problem exist for a long time.Senior talents are not only the foundation of improving business performance and promoting innovation,but also the key factor of maintaining economic growth.The special management talent of senior managers has the characteristics of scarcity,high value and difficult to imitate,which makes it become the senior human capital different from ordinary labor force.The effective performance and compensation of senior managers are not only affected by their personal and corporate characteristics,but also closely related to the level of regional development and the market environment.In the period of transportation lagging behind,there are serious problems such as market segmentation,low efficiency of resource allocation and low degree of marketization of managers.With the development of transportation infrastructure,the rapid development of high-speed railway in our country has broken the situation of market segmentation and stimulated the manager’s market vigor.The emergence of HSR not only has a strong economic effect at the macro level,but also has a far-reaching impact on micro-enterprise behavior.Studies on the economic effects of HSR have mushroomed in academic circles,but few scholars have combined HSR with executive compensation incentives.In fact,how changes in the market environment caused by the opening of HSR affect executive compensation incentives is an interesting and important topic.On the one hand,the opening of HSR has stimulated the urban economy growth,changed the external environment and investment decision-making behavior of enterprises,increased corporate demand for senior management and,therefore,willingness to pay higher compensation to executives;on the other hand,the opening of HSR has widened the boundary of the manager market,promoted the development of managers’marketization,improve the efficiency of resource allocation between enterprises and executives in two-way selection.For enterprises and executives,the effectiveness of compensation incentives is an important factor to determine whether they cooperate or not.This paper attempts to explore the impact of China’s HSR on executive compensation contracts and its mechanism,so as to help us better evaluate the microeconomic consequences of the opening of HSR and clarify the role of management in the formulation of compensation contracts.Based on the data of A-share listed companies in Shanghai and Shenzhen from 2009 to 2019,this paper used the difference in difference(DID)method to study the relationship between the opening of HSR and executive compensation,and discussed its impact mechanism and economic consequences.This paper found that the HSR has a significant positive impact on executive compensation,especially in non-state-owned enterprises,mid-western areas and enterprises with stronger management ability,indicating that the opening of HSR has improved the problem of unbalanced market development of managers to a certain extent,and the market has provided a higher level of compensation for those with management ability.The path test found that the opening of HSR improves the pricing level of managers mainly by improving the degree of marketization of managers.Further research found that the impact of HSR on executive compensation was also reflected in the compensation premium for more capable executives,and the premium compensates for the long-term efforts of executives.In addition,the impact of HSR opening on executive compensation incentive has significant positive impact on corporate performance and innovation,which shows that the opening of HSR on executive compensation incentive is effective.The study of this paper has certain policy significance for accelerating the construction of transportation infrastructure and promoting the marketing of managers.There are three possible contributions to this article.First of all,this paper is an early research article on the impact of the opening of HSR on executive compensation incentive.The study found that the opening of HSR affected the development of the executive market,has a positive impact on executive compensation incentive,and deepened the understanding of the effectiveness of executive compensation contracts under the impact of the opening of HSR.Secondly,this paper continues the research paradigm of "macro-policy affecting micro-enterprise",combines macro-market mechanism with micro-enterprise corporate governance,and expands the relevant literature on the micro-economic effect of high-speed railway opening and executive compensation incentive.Finally,as a quasi-natural experiment scene,this paper effectively alleviated the endogenous problems in the previous research on executive compensation incentive,which is helpful to identify the relationship between the opening of HSR and executive compensation incentive correctly.