Investigation into the effects of equity incentives for executives and R&D personnel on corporate financialization

Sichong Chen, Shan Liang, Meng Chen and Didi Zhang

Finance Research Letters, 2025, vol. 77, issue C

Abstract: This study examines, from the perspectives of executive and R&D personnel, whether equity incentives influence the financialization of enterprises, and investigates the underlying mechanism through which this influence operates. Findings reveal that equity incentives for corporate executives contribute to reducing corporate financialization. Furthermore, equity incentives decrease excess cash holdings in enterprises, which subsequently mitigates the degree of corporate financialization. Notably, compared to state-owned enterprises (SOEs), equity incentives for executives in non-SOEs yields a more significant reduction in corporate financialization.

Keywords: Equity incentives; Cash holdings; Corporate financialization (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:77:y:2025:i:c:s1544612325003654

DOI: 10.1016/j.frl.2025.107102

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