As a critical decision proposition of firm internationalization, FDI pace has not drawn much academic attention.This paper deep explores certain driving mechanisms of FDI pace decision from a perspective of corporate governance.Then based on FDI data all over the world by Chinese listed companies from 2004 to 2013, it examines the impact of top executive stock-based compensation on FDI pace and the adjustment role of internal and external monitoring mechanisms facing topexecutives in this relationship.It arrives at the resultsas follows:firstly, generally stock-based compensation makes top executives tend to select rapid-expansion investment strategy;secondly, internal monitoring mechanisms trengthens the positive relationship between top executive stock-based compensation and FDI pace;thirdly, external monitoring mechanism weakens the positive relationship between top executive stock-based compensation and FDI pace.Further study demonstrates that for private enterprises, the effect of top executive stock-based compensation on speeding up FDI pace and the adjustment role of external monitoring mechanisms are more significant;and for both private and state-owned enterprises, the adjustment role of internal monitoring mechanisms is very significant.This paper gives corresponding policy recommendations on how to fully mobilize the enthusiasm and initiative of top executives to implement going-out strategy and grasp internationalization opportunities.
Top Executive Stock-based Compensation, Monitoring Mechanisms and FDI Pace
Journal of Finance and Economics Vol. 42, Issue 03, pp. 4 - 15 (2016) DOI:10.16538/j.cnki.jfe.2016.03.001
Cite this article
Ru Yi, Guo Chenxi, Lü Ping. Top Executive Stock-based Compensation, Monitoring Mechanisms and FDI Pace[J]. Journal of Finance and Economics, 2016, 42(3): 4–15.
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