Study on the relationship between corporate overinvestment and management incentives—An analysis from the perspective of different ownership structures

Zixuan Yu

doi:10.24294/jipd.v8i11.6870

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Study on the relationship between corporate overinvestment and management incentives—An analysis from the perspective of different ownership structures

Zixuan Yu

Journal of Infrastructure Policy and Development 2024, 8(11), 6870; https://doi.org/10.24294/jipd.v8i11.6870

Submitted：04 Jun 2024

Accepted：25 Jun 2024

Published：17 Oct 2024

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Abstract

This paper aims to explore the relationship between corporate overinvestment and management incentives, focusing particularly on the influence of different ownership structures. Utilizing agency theory and ownership structure theory, this study constructs a theoretical framework and posits hypotheses on how management incentives might influence corporate overinvestment behaviors under different ownership structures. Listed companies from 2010 to 2020 were selected as the research sample, and the hypotheses were empirically tested using descriptive statistics, correlation analysis, and regression analysis. The findings suggest that a relatively concentrated ownership structure may encourage management to adopt more cautious investment strategies, thus reducing overinvestment behaviors; while under a dispersed ownership structure, the relationship between management incentives and overinvestment is more complex. This study provides new evidence on how management incentive mechanisms influence corporate decision-making in different ownership environments, offering significant theoretical and practical implications for improving internal control and incentive mechanisms.

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References

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