Factors that Affect the Efficiency of Corporate Investment—A Study of Executive Equity Incentive and Executive Financial Background

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Project Title: Factors that Affect the Efficiency of Corporate Investment—A Study of Executive Equity Incentive and Executive Financial Background
Author: Mr. Liu YuLu
Advisor: Associate Professor Dr. Qiu Chao
Degree: Master of Business Administration (International Program)
Major: International Business Management
Faculty: Graduate Schools
Academic year: 2021
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Conference
Conference Proceedings
2nd National and International Academic Conference “Innovation and Management for Sustainability” 15-16 December 2020

Citation

Liu, YuLu. (2021). Factors that affect the efficiency of corporate investment—A study of executive equity incentive and executive financial background. (Master’s independent study). Bangkok: Siam University.


Abstract

The China Securities Regulatory Commission issued the formal “Administrative Measures for Equity Incentives for Listed Companies.” With the support of national policies, the Securities Regulatory Commission should deregulate and strengthen supervision to make the environment of China’s equity incentive system more perfect and mature, and the equity incentive mechanism more reasonable and standardized. Let enterprises better adapt to the development of the market. Investment behavior is the prerequisite for enterprises to create economic value, and investment decision-making plays a decisive role in the survival and development of the company.

This paper analyzed the relationship between executive equity incentives and investment efficiency, and used the financial background of executives as an intermediary variable to examine the mechanism of influence on the relationship between the two. This article selected the 2012-2016 Shanghai and Shenzhen A-share listed companies as the research sample, selected the shareholding ratio of senior executives as a substitute variable for equity incentives, studied the impact of executive equity incentives on investment efficiency, considered the background factors of executives, and further studied the impact of executive financial background on the relationship between executive equity incentives and investment efficiency, and distinguished the nature of property rights to make research and argumentation. The research conclusions of this article provided theoretical support and empirical evidence for how companies formulate equity incentive plans, how to face the financial background of executives, and improve corporate investment efficiency.

Keywords: Executive Equity Incentives, Enterprise Investment Efficiency, Managerial Financial Background.


Factors that Affect the Efficiency of Corporate Investment—A Study of Executive Equity Incentive and Executive Financial Background

Master of Business Administration (International Program), Siam University, Bangkok, Thailand

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