Does Managerial Ownership Restrain Inefficient Investment in Enterprises? Evidence from China's Listed Firms

With the separation of ownership and management rights, companies will often have to establish the principal-agent relationship. In order to solve the problem, listed companies tend to implement equity incentive to reduce agency cost and promote the value of the enterprise. However, managements make investment decisions based on their own interests rather than based on the maximization of enterprise value due to the existence of principal-agent problem. That is inefficient investment. To provide suggestions for the future management of listed companies, this paper selects relevant materials from 2008 to 2013 with managerial ownership of A-share listed companies as samples, studying the relationship between managerial ownership and inefficient investment under the compensation of management.