How the Equity Incentives Affect Managerial Behavior under the Degree of Product Market Competition

• Main Authors: Li, Pei-Jhen, 李珮禎
• Other Authors: Wang, Sue-Fung
• Format: Others
• Language: en_US
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/83423930925129415427

碩士 === 國立交通大學 === 財務金融研究所 === 101 === This paper adds a new dimension to the managerial incentives literature by establishing a link between product market competition and the impact of equity incentives to managerial behavior. Managers with high equity incentives engage in higher level of earnings management, in order to influence firm's stock price and bolster their compensation. Nevertheless, we derive a notion that competition has dominant impact on the strength of equity incentive to managerial behavior. Competition decrease managers' private benefit behavior, while treat of liquidation increase firms' need of earnings management. Although equity incentives bring a new set of problems, it still a helpful tool of aligning interest of mangers and shareholders by pushing managers to meet or beat analyst forecast.