Executive Stock Incentive and Major Shareholder Tunneling——Study on the stability of collusion between shareholder and man
Read
DownLoad |
| Title | Executive Stock Incentive and Major Shareholder Tunneling——Study on the stability of collusion between shareholder and man
|
| Author | Liu Jingjian, Ji Danning and Fu Jie |
| Organization | Dalian University of Technology, Faculty of Management and Economics |
| Email | liujingjian@dlut.edu.cn，danning007@dlut.mail.edu.cn，armfujie@foxmail.com |
| Key Words | Equity Incentive; Executive Stockholding; Major Shareholder Tunneling; Collusion Relationship |
| Abstract | By introducing collusion compensation into the agency model, this paper explores the effects of executive equity incentive to the stability of collusion relationship and tunneling from major shareholder. Through numerical simulation and normative analysis, we elucidate the mechanism of executive equity incentive on tunneling from three aspects, namely income effect, risk effect and position transformation effect, and to further reveal the moderating mechanism by the major shareholder heterogeneity characteristics and different system environment. The empirical results show that: executive equity incentive can restrain tunneling, and the effect becomes more remarkable in companies that shareholder heterogeneity characteristics show stronger tunneling motivation and their system environment is more apt for tunneling, which contribute to internal governance mechanism for protecting investors; by use of quasinatural experiment, PSM-DID identity strategy test supports our hypotheses, and show that two-year effect is more significant. Our study demonstrates that executive equity incentive can restrain tunneling and these exists instable relationship between major shareholders and managers, which enlighten to restrain tunneling through both internal and external governance mechanism. |
| Serial Number | WP1202 |
| Time | 2017-06-30 |
|