Open AccessEffect of Equity Incentive on Inefficient Investment in Chinese State-owned Enterprises
Author(s) -
Yan Lu
Publication year - 2016
Publication title -
international journal of economics and finance
Language(s) - English
Resource type - Journals
eISSN - 1916-9728
pISSN - 1916-971X
DOI - 10.5539/ijef.v8n8p222
Subject(s) - incentive , equity (law) , business , investment (military) , private equity fund , equity capital markets , equity ratio , finance , private equity firm , economics , monetary economics , market economy , private equity , politics , political science , law
This study examines the impact of equity incentive on inefficient investment based on the sample of Chinese listed companies of Shanghai stock market. I show that: both of over-investment and under-investment are existed among state-owned enterprises, the level of under-investment is worse than the level of over-investment, equity incentive is not that popular among state-owned enterprises; equity incentive can limit over-investment as well as under-investment significantly, so universality of equity incentive among state-owned enterprises needs to be improved.