Employee Follow-on Investment And Enterprise Total Factor Productivity

The 20 th National Congress of the Communist Party of China proposes to accelerate the construction of a modern economic system,focus on improving the productivity of the entire factor.On the premise of adhering to the theme of elevating good-quality development,enhancing the promotion of total factor productivity as a crucial objectives in the economic advance moment of the new era,and the promotion of total factor productivity is also the key driving power for the optimization of the economic structure of China.As an important vehicle of changing the economic increasing pattern,enterprises shoulder the important historical task of enhancing the efficiency of resource usage and realizing quickly and stably economic blossom.Total factor productivity reflects not only the technological level of a company,but also a comprehensively embodies the knowledge level of the enterprise’s material production,management skills,institutional environment and other factors.The key to its improvement lies in the effective allocation of resources,research and development and technological progress,as well as the improvement of organizational or management efficiency,which cannot be achieved without the dedication of human capital.Human resources are the driving force behind a company’s continued development and the production efficiency of enterprises is firsthand connected to the manner of its employees.Therefore,motivating employees,improving their enthusiasm and satisfaction,and stabilizing core talents are the main ways for enterprises to improve their total factor productivity.Employee follow-on investment is a means of both motivation and discipline for employees.It refers to the establishment of independent subsidiaries or separate accounting entities in the course of new projects and business development owned by the company,requiring core executives and key employees to invest a certain amount of material capital in advance,sharing profits with the company while sharing operational risks.At present,more and more companies have realized that the key to mechanism innovation is people,that is,how to give full play to the value of core staff.This mechanism forms the interest binding relationship between capital and labor,enterprises and employees,and employees and employees,realizes the organic combination of shareholders’ interests,corporate interests and employees’ personal interests,and forms the transformation mechanism from employees to partners,thus stimulating employees’ enthusiasm for innovation and entrepreneurship.However,in the field of theory and practice,opinions on the research of employees and investment are quite different.On the one hand,employee follow-on investment can enhance the sense of belonging and passion of staff,which is beneficial to select the superior and eliminate the inferior of human capital,decrease financing capital,and thus improve the business efficiency of firms.On the other hand,employee follow-on investment may have a pipeline of interest delivery,which cannot avoid the development trend of the market and the development strategy of the representative enterprise.Therefore,in the environment of promoting high-quality development,what is the effect of implementing employee follow-on investment on the total factor productivity of enterprises? What’s the mechanism behind this?In order to confirm the above doubts,this thesis uses the data of non-financial quoted companies in Shanghai and Shenzhen stock exchanges of A shares from 2014 to 2020 as economic assessment indicators to empirically test the impact of the implementation of the new incentive mechanism of employee follow-on investment on the total factor productivity of enterprises,and the relevant robustness test is carried out,which all confirm the robustness of the conclusions and verify the accuracy of the hypotheses in this thesis.Then,it discusses the mechanism of inefficient investment and corporate innovation in the role of employee follow-on investment on the total factor productivity of firms.At last,this thesis probes the impact of the core employees of senior executives and non-senior executives in the employee investment plan on the total factor productivity of firms,the analysis of the heterogeneity of corporate features and the difference of external market environment on the employee follow-on investment and the total factor productivity of the enterprise.With the results of each empirical test confirming,the research conclusions of this thesis have the following three points:(1)Employee follow-on investment can significantly enhance enterprise total factor productivity.(2)Employee follow-on investment can increase a firm’s total factor productivity by reducing non-efficient investment,and can also be achieved by increasing innovation output of listed companies,both of which play intermediary effect.(3)Employee follow-on investment can significantly increase a firm’s total factor productivity with a stronger degree of incentive for core employees;In addition,motivating non-executive core employees has a stronger effect on a firm’s total factor productivity compared to executives.(4)Based on the heterogeneity of corporate features,the result turns out that employee follow-on investment in non-state quoted companies and quoted companies with lower division rate of two rights have a more significant impact on the total factor productivity of firms.Given the differences in the external market environment of companies,it is found that the implementation of employee follow-on investment in more market-oriented regions and more competitive industries was more effective in improving the total factor productivity of companies.In the end,this thesis raises certain correlative policy recommendations:(1)Rational formulate of employee follow-on investment.(2)Improve the laws and regulations on employee follow-on investment.(3)Strengthen the disclosure and supervision of employee follow-on investment companies.(4)The competition environment of labor force is optimized to improve the allocation efficiency of resources.The contributions of this thesis are primarily shown in several fields:(1)Extending the existing study on employee follow-on investment,and placing emphasis on the mechanism that employee follow-on investment can influence a firm’s total factor productivity through the lens of inefficient investment and enterprise innovation.It also provides insight into the effect of the level of motivation of core employees in employee follow-on investment versus incentives of top manages on the total factor productivity of firms.The empirical evidence found can further improve the relevant theories of employee follow-on investment.(2)It extends the research category on total factor productivity in enterprises and explores the relationship between employee follow-on investment and enterprise total factor productivity from a micro perspective,providing empirical evidence for the improvement of enterprise production efficiency.(3)In practice,it provides certain academic support for the government related sectors to enact and ameliorate legal regulations associated with employee follow-on investment,and provide decision-making basis for our newly implemented listed companies with employee investment.