Equity Incentive, Dividend Distribution and Internal Manipulation of Empirical Research in System Dynamics
|School||Inner Mongolia University of Finance and Economics|
|Keywords||Incentive stock options (ISOs) insider manipulation dividenddistribution system dynamics (SD)|
Because the transition economies of China, China’s listed companies have twodistinct characteristics: The first, China’s listed companies are mostly state-owned orstate-controlled enterprises, and most of monopoly.The second, the largestshareholder of listed companies should be all of the country the people, but because ofits absence, in fact, a certain level of government to become his agent. And thepromotion of enterprise managers, hiring depends on its higher authorities-the agentof government departments appreciated. Thus, the de facto control of listedcompanies in China by the company’s managers and its parent governmentdepartments, they form the actual control of the enterprise. We believe that there isspecial principal-agent problem-internal control and external investors, known as theinternal manipulation. And enterprise implementation of equity incentive exacerbatedby internal manipulation to achieve excess returns and dividend distribution, the studyof the relationship between the equity incentive, dividend distribution and internalmanipulation, the perfect agency problems, the development of equity incentivesystem and The dividend policy will have important significance.This paper is divided into seven chapters, each chapter reads as follows:Chapter I the article a brief description, including research background, thedomestic research, research significance, research, and research framework.Chapter II case studies, analysis of the implementation of equity incentiveprograms Yili Group, focuses on the problem of the presence of non-compliance bythe Queen in the formulation and implementation, leads to internal manipulation ofthe phenomenon.Chapter III literature review, equity incentive managers manipulate, dividenddistribution emptied phenomenon, equity incentive dividend literature review andcomments.Chapter IV theoretical analysis, introduces equity incentive theory and systemdynamics theory proposed internal control and external investors, agency theory, andfrom the perspective of game theory, a detailed analysis of the internal conspiracy.Chapter V empirical analysis of the correlation between the equity incentive andinternal manipulation, equity incentive and dividend distribution, dividenddistribution and internal manipulation, incentive, dividends and internal manipulationand study the incentive effects of the measure.Chapter VI simulation analysis, to suppress internal manipulation simulation model, the implementation of laws and regulations restricting the effectiveness of theexternal audit constraints and market constraints, inhibit the effectiveness of the bestanalysis of what kind of policy.Chapter VII the policy recommendations based on the above theoretical analysis,empirical analysis, especially the implementation of the simulation policy, determinethe policy choices proposed micro, meso and macro three types of policyrecommendations.The main conclusions are as follows:The first,the equity incentive and corporate insider manipulation was a significantpositive correlation between real earnings management, followed by majorshareholders hollowed out, and finally the accrued earnings management.The sencond,Equity incentive corporate dividend was a significant positivecorrelation, and Capital reserves conversed to the highest degree of stock, followed bya bonus issue ratio, the last cash dividend; also found the equity incentive existence ofthe business over dividends.The third, the dividend distribution separate internal manipulation inhibitoryeffect exists, but their interaction, dividend distribution and internal manipulation waspositively correlated with equity incentive companies, dividend inhibit the effect ofinternal manipulation is significantly weakened.The fourth,Equity incentive effect and the number of incentives, the exerciseprice, the incentive period was positively correlated with the industry average returnon net assets, the exercise conditions, the number of incentive share capital wasnegatively correlated.The fifth, the laws of the effective improvement assessed the behavior of theviolation, to some extent, to protect the interests of outside shareholders; externalaudit to improve the quality, can effectively suppress internal manipulation, externalreturns to shareholders; market constraints Although the simulation results are poor,but in fact is more important, but the long-term development need to focus onImproving the Regulations and market efficiency guide, these are the need to focus onthe direction of the policy implementers.