Effect of Compensation Reform Program on Real Economy——Empirical Evidence from the Enterprise Financialization
Based on a sample of A-share listed firms controlled by SOE groups,this paper empirically tests the real economy effect of the 2015 Compensation Reform Program(CRP)from the perspective of corporate financialisation.The results show that the pay inversion phenomenon after the implementation of the CRP significantly increases the degree of financialisation of the firms,and the increase is mainly in long-term financialised investments.Mechanism tests indicate that performance decline and appraisal pressure are the two mechanisms behind these effects.Further tests reveal that the effects are mainly evident in non-protective industries and in bullish stock market conditions,as well as in regions with low marketization.In view of this,the government should pay attention to the differences between the internal and external environments of enterprises in the reform and promote the implementation of the reform measures in a classified manner,and guide enterprises to set up a sound appraisal system that is compatible with the CRP,taking into account the total number of performance items and the components of the performance.Firms should be prudent in the use of financial assets,focusing more on promoting the development of the core business.
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